In the modern world, money is an important part of everyone’s lives. If you try to think of the last day that you didn’t think about money at all, I bet you won’t be able to do it! Even if it’s as simple as making a purchase at a shop or paying your bus fare, money is an integral part of our world.
People have very different ideas about money, many of which can be negative if taken to excess. Let’s examine some of the common ideas that people have about money, and see if you fall into any of these categories. We can then examine how to fix these common issues and develop healthy money habits.
The Big Spender
You probably know someone in your life who lives beyond their means, or you may even be one yourself. The Big Spender makes purchases beyond what they can afford, whether it’s as simple as buying a fancy coffee on their way to work every morning, or as extravagant as a vehicle or house that they can’t really afford. In the same way that other people may eat to make themselves feel better, a spender may not be happy unless they are spending money. They rack up credit card debt to improve their mood, because spending is an addiction to them.
This type of person hates money and may think they are too good to concern themselves with thoughts of wealth. They look down upon wealthy business people and celebrities, often holding a belief such as “money is the root of all evil.” Normally this type of belief is acquired in childhood from a parent or some other authority figure. The righteous person may genuinely have no interest in acquiring money, or the more likely situation is that they are jealous of the truly wealthy and successful people of the world. In either case, they avoid acquiring large amounts of money or material possessions.
The exact opposite of The Big Spender is The Scrooge. You are probably familiar with the character Ebenezer Scrooge, the cold-hearted miser from Charles Dickens’ book A Christmas Carol. For our purposes, The Scrooge exhibits many of the same characteristics. They are frugal and thrifty, saving every possible penny that they can. They are afraid some financial problem will befall them, such as losing their job or becoming ill. They feel they need to save as much as possible, just in case something bad happens. The sad part is that despite fearing poverty so much, they end up nearly living in the very conditions they want to avoid.
A covetous person obsesses over acquiring money or material possessions. Opposite to the righteous, a covetous person believes that money truly can buy happiness and solve all of their problems. They may spend hours per day imagining what they would do if they won the lottery, or they may fall prey to “get rich quick” schemes in an attempt to acquire the wealth they are after. They may bounce from one new business idea or “hot stock tip” after another, or even worse, spend so much time thinking about money that they never take any action to actually acquire it.
All of these categories in moderation can provide good balance to a person’s life. The problem is when one category dominates your financial life too much. If you’re a big spender, you may want to ask yourself if material possessions can really make you happy. If you’re a scrooge, think if spending hours per week clipping coupons to save a few cents is really worth your time. For the covetous, why can’t you be happy today without winning the lottery? If you take some time to examine your thoughts, you will discover the true motivations that caused these patterns to occur in your life.
The important thing to remember is that money is just a tool. Just like any other tool, money can be used for good or for evil. It can be used to provide food and shelter for your family, to engage in fun activities with your friends and create lasting memories, and provide a comfortable life. On the other hand, money can be the source of all kinds of neurosis and stress. When we obsess over it, or work ourselves to the point of illness or injury to acquire it, then we have to ask if it’s truly worth it. You may realize that once you have enough money to provide a decent home and life for yourself and your family, with a bit extra to set aside in an investment account through a company like CMC Markets each month for retirement, you don’t really need much else.
Above all else, look for balance when it comes to money. Life isn’t about making more money than your brother-in-law or acquiring all of the latest gadgets. Changing your relationship with money requires a major change in how you think. However, once you determine the correct role that money plays in your life, things will get a lot less stressful.