What Money Means to You. Discover Your Money Habits!

Updated: June 24, 2020

What is money? In simple words, money is a medium of exchange that makes it easy to turn what you have (i.e. labor, skills, ideas, etc.) into what you need or want (i.e. food, shelter, clothes, etc.) But have you ever thought about what money means to you outside of economics?

 The answer to that question, has a HUGE impact on our finances, whether we’re aware of it or not.

 In my early 20s, I found myself with an unexpected $12,000. It’s long gone now, of course, but the funny thing is that I have no idea what I spent it on. Sure, some went to food…maybe a new outfit or two…but the bulk of it disappeared without a trace.

 Thinking back I realize that I spent most of it on non-material things —  things I was buying in a quest for freedom, happiness or love.

 And that’s the power of the value of money in our life. I didn’t know what money means to me but I still spent it searching for something that can’t be bought. And if you’re not careful, the same could happen to you!

 So, what exactly is the meaning of money for us?

Let’s take a look at some possible answers.

Related post: How to Overcome Financial Procrastination.

1) Freedom

Freedom – the power to act without hindrance or restraint

If you ask a random person “what does money mean to you?”, chances are they’ll say “money means freedom!”.

That’s easy to understand, because financial freedom can provide you the option to do what you want in life, whether it’s

• travel to new places,
• giving to charity,
• being able to share a good time with your family

And who doesn’t want that?

But the thing is, if you need to have money to be free, you’re probably going to spend a good portion of your life thinking you’re trapped, regardless of how good your life may be.

And it’s not usually enough to just be free, we want to act on our freedom. We want to enjoy and experience different things. And this action costs money.

So, while money does mean freedom, keep in mind that taking action on that freedom costs money. And if you’re not careful your “freedom” could put you back in the poor house.

Real financial freedom doesn’t just come from having a bunch of money, it also comes from being sustainable over time by having an income that is larger than the costs of doing what you want.

Q: Do you need money to be happy?

A: The short answer is “no”. The long answer is “no, money’s not happiness because…”.

…a few years ago the Organization for Economic Cooperation and Development (OECD) found that people were using more antidepressants now than before.

The countries looked at were all mostly considered wealthy. And while the U.S.A. wasn’t included in the OECD’s study, this article here included the U.S.A. and noted that America took the top spot for antidepressant growth.

It’s a complicated situation, but the study at least suggests that there’s not a positive relationship between wealth and happiness.

2) Security

Security – the state of being free from danger or threat

Most of us go through our day full of worry. Because we realize there’s not enough money in the bank, we’ve maxed out our credit and are in debt, and any surprise expenses can throw our financial position into chaos.

This feeling would probably go away if we had savings in the bank! This is why money means security to a lot of people as well. 

You can guess that the “money means freedom” crowd would tend to spend more money, and the “money means security” crowd would tend to save more.

This doesn’t mean that money can’t be freedom and security at the same time, it just means that you’ll have to budget carefully and separate your money into two funds. A fund for your “freedom money” and a fund for your “security money”.

3) Comfort

Comfort – a state of physical ease and freedom from pain or constraint.

What do we use money for? Comfort!

Anyone who’s ever flown first class knows that comfort costs money! But of course, it’s not just on planes, additional comfort requires lots of spending everywhere you go.

And for many of us that’s the purpose of having a high income and lots of money…to make our lives, and the lives of our families better.

But how should I think about money to maximize my comfort? There’s a principle about money and comfort that says you should spend more money where you spend more time.

For example, we spend around 8 hours each day sleeping. So, we should invest in a high quality mattress to optimize our comfort during these hours.

And, if you spend most of your waking hours in a chair, make sure you invest in a good one.

Keep this principle in mind to maximize your comfort in life.

Related Post: Tips For Developing a Wealthy Mindset.

4) Happiness

Happy – feeling or showing pleasure or contentment.

A common saying is that money can’t buy happiness. But that doesn’t stop people from wondering “does money mean happiness”.

And while not everybody has the same opinion here, I’m sure we can all agree that having money can prevent some unhappiness.

Money bringing happiness makes some sense because it can

• give you greater access to what you need and want
• make you feel that you’re living a successful life
• make you feel that your hard work is starting to pay off
• help you take care of the things you worry about, such as debt, college expenses, investing for future retirement

But at the same time, any happiness money brings is temporary. Being regularly content isn’t all about money and has more to do with your state of mind than the money in your bank account.

Q: Is money the most important thing in life?

A: Short answer “no”. Long answer “no, because…”

…money, in essence, is just a medium of exchange. The only value that money has is that it allows you to get other things with it.

You could say, “that’s exactly why money is the most important thing in life!”, but ask yourself why you want money in first place.

Whatever answer you come up with (unless you just want to look at stacks of cash) will be the truly important thing. And the money is just the means to that end.

5) Power

Power – the capacity or ability to direct or influence the behavior of others or the course of events.

Money can help us manage our surroundings, whether it’s by influencing people or events.

For example, imagine negotiating with a car dealer. The negotiations are more likely to go your way if you have the money and can pay cash, right? That’s because money is influence.

But money and power are often seen negatively as well. After all, when people ask “what does money do to people” the most common answer is “corrupt”.

Using money as power in business negotiations is one thing but, exercising power over people can have negative effects as well.

It can hurt your personal relationships if you’re not careful, and it can make it harder for you to emotionally handle situations that you can’t fix with money.

And you probably don’t want to become that person who thinks they can buy anyone or anything for the right price…

Related post: Inspirational Money Quotes.

6) Status

Status – the relative social, professional, or other standing of someone or something.

When you think about what can money do for you, you may imagine that it can put you in the right clothes, the right car, and right house.

Because being seen with these things can help us signal to others that we have money and success.

Using our income in this way is extremely common. After all, that’s why “keeping up with the Jones’” is a thing! But keeping up with the Jones’ can leave you broke and in debt if you’re not careful!

And who knows, while you’re trying to convince the couple across the street of your status, the girl next door may be trying to convince you of her high status, while some other guy is trying to convince her of his high status!

Do yourself a favor, and don’t get caught up in that game.

Q: Can we live without money?

A: Short answer, “yes”. Long answer “yes, but…”

…living your current lifestyle without money may be difficult (if not impossible). Even if you used no cash and only lived off the kindness of others, the fact remains that the other people would be using cash to support you.

But it’s possible to live off the land with no cash if you really wanted to. Check out these people here. For them, money is nothing in life.

7) Love

Love – an intense feeling of deep affection

When we think of philanthropists, we usually think of people like Bill Gates giving money to charities. But did you know that philanthropy literally means “love of man”?

It says something pretty profound that the love of man is associated with the giving of money. And it’s probably something that we’ve all done.

But there’s also another side to money being associated with love. It’s the case that many of us who are uncomfortable expressing our affection verbally or physically are comfortable expressing it financially.

In this case, money may not be exactly equal to love, but it certainly makes it easier to express affection.

What Money Really Is

The meaning we give to money in our life depends on the priorities we have and pressures we’re under.

If you’re on a tight budget and can’t afford to put food on the table, you’re probably going to see money as security more than status.

Or if you’re a happy bachelorette, you’re probably going to feel that money represents freedom and independence more than love.

But what is money really? It’s tool to get us from where we are to where we want to be. It’s a medium of exchange that helps us get the thing we want but don’t have.

Cheers!

Related Post: 20 Ways to Stop spending Money You Don’t Have.