A Lot of People Don't Understand What Money Really Is — Do You?


What is money, really? I'm not talking about the physical or economic properties of currency. I'm talking about what money means to you — and whether you work for it or it works for you. Once you understand what money really is, then you can harness it to suit your needs. (See also: Saving Money Is Easy If You Set the Right Goals)

Let's Get Real: We Need Money

It's true that money can't buy happiness. But neither can poverty. We need money — for survival, as well as comfort. It's a means to an end. So before we go any further let's do away with the whole idea that money is the root of all evil; instead let's play with the hand we've been dealt, and make it work to our favor.

Why Money Gets a Bad Rap

Money gets a bad rap for a variety of reasons, but it boils down to control, or lack thereof. When we lose control over our relationship with money, we lose control over our lives.

For example, in The Story of Stuff, the narrator describes a scenario we've all seen:

  • Go to work every day.
  • Return home exhausted, flip on the TV.
  • See an advertisement for a new style of shoes that you must have.
  • Go out and buy those shoes.
  • But you couldn't really afford them so now you have to work harder to pay for them.
  • Return home from work even more tired, so flip on the TV.
  • See another ad for something you "need" to be happy.
  • And so on.

This person is on an unhappy hamster wheel with no end in sight. What they currently have is never enough, and they're always playing "catch-up" with finances. They never feel like they're a step ahead; rather, they manage their finances reactively and don't see a way out of the rut (which often ends up in some act of hopeless spending that makes the rut even deeper).

Not only is this a trap of consumerism, but it's a trap of unconscious spending. This person — like so many of us — allows their finances to control them.

What Do You Want to Do With Your Life?

A big fat pile of money won't do you any good unless you know how it can help you live the life of your dreams.

Arbitrarily picking an amount of money that you need (to earn, or to have saved) in order to be happy is a losing proposition. Because inevitably when you reach that benchmark, you'll realize it still isn't enough. (Hint: It's never enough). Instead, you need to quantify your life and your goals, and design a plan accordingly.

When I was a financial planner, I differentiated myself and became known for focusing on how money can help you live your life, rather than the other way around. I put aside the charts and investment graphs, and instead opened meetings with a simple question: "What do you want to do with your life?"

This initially took people off-guard, but once they opened up to it, it was amazing the stuff that came out in conversation, and how intrinsically money is related to every aspect of our lives.

Money Makes Dreams Happen

Once we started talking about dreams, we also started making them happen. I had one client who had returned from a vacation in Australia and said she wanted to move there. It was a pie-in-the-sky suggestion in her mind when she first said it, but when I took her seriously and showed her it was possible, we devised an action plan that moved her to Australia within 18 months of that meeting. She lives there now and just became an Australian citizen.

Another client was a very talented musician, and he wanted to make his living with music rather than as an Internet specialist. We knew there would be a discrepancy in income between his current and desired careers (at least at first), so we harnessed his finances to protect his income and assets, reduce his living expenses, earn some additional cash through teaching yoga, and provide him with the time and freedom he needed to create music. Today his band is very popular, and he makes a good living.

It even happened to me. When I was in the throes of working as a financial planner, I thought that once I hit certain income benchmarks, life would get easier. It didn't. Instead as I worked harder and harder, I was ignoring my own dreams of long-term, immersive travel, and I realized I couldn't wait another 30 years for a conventional retirement to see the world. So I sold everything I owned, invested the proceeds so I could set up shop again anywhere in the world if and when I so chose, created a stream of income from the sale of my business that could float my travel/living expenses for the first while, and eventually developed a writing career that could support my full-time travels in a financially sustainable way.

Now, I earn a fraction of the money I earned as a financial planner, but I want for less than I ever did before.

How to Avoid Being a Slave to Money

There are a few tricks to achieving results like the above. Let's work through them one by one.

Understand Your Spending

When we spend unconsciously or hopelessly (as in "What difference will it make? I'm already in debt"), we do a lot of damage. Instead, face your budget head-on and track your expenses. Understand where and how and why you spend your money — and in turn, how you can curb it, if necessary.

Set Effective and Passionate Goals

Moving to Australia or becoming a rock star are lofty goals, but ones that are passionate and personal. My clients had a detailed vision of how they wanted their lives to be, and with that vision in mind, they were able to make the financial changes and sacrifices they needed to get there. In some cases, they hit the moon rather than the stars, but that's also an effective goal-setting technique — to aim for something better than a boring goal like getting out of debt, for example. (See also: Goal Setting: Getting out of Debt, Once and For All).


The clients I helped the most were the ones who talked openly about money — and everything that talking about money leads to. But it is a double-edged sword as talking about money matters can be uncomfortable, or even the catalyst for an argument. (See also: Why Couples Fight About Money, and What to Do About It).

If you're bound for big life changes, there can also be some uncomfortable conversations with friends and family who don't understand or approve of your goals, or having to say no to outings and events that financially drain your ability to achieve your passionate goals.

But you might also be surprised at the support you'll get when you tell the world about your plans, and even the ripple effect of inspiration that might ensue. Your passionate goals don't necessarily need to involve world travel or rock-stardom. Maybe you want a home of your own, or a cottage on a lake, or simply to work less, or to have children, or any combination thereof. It's your life; you get to design it accordingly… as long as you want to take control of your life and finances.

Money, Empowerment, and Self Worth

Having control over your finances — and thus, your lifestyle — can be incredibly empowering. You don't need to make a lot of money to enjoy it either. When I was a financial planner I made well over six figures. But I was significantly happier years later, earning just $20,000 a year as a writer and traveling the world.

Increasing your self worth isn't a monetary exercise. It's an exercise in self-expression, creativity, and passion.

Where there's a will, there's a way.

What do you want your money to do for you? Please share in comments!

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Guest's picture

I would like a home of my own, with my own garden and garage or at least a driveway. I hope it will happen in two years.

Guest's picture

Money is a placeholder for time. If I have the money I need, I can spend my time in the manner of my own choosing. If I don't have the money I need, I either have to change my "needs" or spend my time in the manner of someone else's choosing....for money of course.

Guest's picture

I Would to work with Céline Dion . Buy a loft and travel with my job .