In part 1 of this series of blogs, we talked about the value of “getting on the scale” and confronting the brutal reality of where your finances are at currently. We spoke about the first few steps of any good financial check-up: write down everything your family makes, write down every bill and debt your family owes, and over the next 30 days, write down everything your family spends – every penny, whether it’s the mortgage payment or a soda and a candy bar.
Before we dive into specific principles about how we use money, we need to speak to the thought process about money. We all have a specific “Money View” as Chris Brady talks about, and the way we view money creates habits and practices in our everyday lives. If we see money as a way to buy what makes us happy, then we will take actions and spend based on that money view. If we see money as a god, then we will sacrifice anything else in our lives to earn more. If we see money as a motivator, then we will use it to motivate us towards greatness in other areas of our lives. So an important principle has to do with self-reflection: how do you view money? (And if you answer instantly, you probably haven’t thought about it enough…)
Money is simply a means of exchange. Let’s talk about a trade and barter system (because that’s what we are actually using). If I have eggs and you have apples, we could trade eggs for apples. But what if you don’t want eggs? What if you are looking for peaches? Then you will need a place to store the value of your apples because they will eventually rot, Money is the intermediary that we use to exchange items or labor for value – I receive money for eggs, you receive money for apples, then we can use that money for whatever we are looking to trade for. It’s still trade and barter, and our culture recognizes that money has a certain value and can be traded for items instead of the necessity of only trading items for items.
Money is also used to transfer payment for labor. In olden times, soldiers might receive salt for their labor, or would receive a day’s wages in food or drink. Today, money is recognized as payment for labor – the employee gives eight hours of their day and receives a certain amount of money in response. This will be an eye opener for some people – with this “time for money” exchange in mind, you’re actually trading your labor to Wal-Mart. You’re trading your sweat equity for that tank of gas. It’s worth some self-reflection: how much is an hour of my time worth? That’s a question for an entirely different blog.
Money is also amoral – it is neither good nor bad, in and of itself. If there was a stack of $100 bills on a table, that stack of green paper will probably not jump off the table and slap anyone in the face. So when people talk about how terrible money is or when some misquote the Scripture by saying, “Money is the root of all evil,” they’re actually misguided. Money is only an enhancer – it enhances the goodness or evil-ness of the person who possesses it. Good people will do good things with money and bad people will do bad things with money (I’m aware that good people can do bad things with money and visa versa, but we need to speak to generalities since we cannot highlight every example).
Before we dive into specific principles about what to do with money, it was important that we discuss the way that we view money. Feel free to join the conversation and leave your thoughts in the comments. How have you seen a poor money view destroy someone or leave them in a bad place? Have you experienced someone obsessed with money and the results of that incorrect value of money?
Chris Craft
The Soapbox 