defining money

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today i’m defining the concept of money. how we think about money in our lives is at the core of personal finances, but the idea of money is often abstract, scary, and confusing.

now that i have more free time, i’m going to start writing more about money in the hopes that my experiences can help others. there is a stigma to talking about money in our culture, and i want to break that because i believe our finances are essential to living happy and healthy lives. that being said, please understand that i am speaking from my own personal belief system and set of experiences. i hope to present concepts that are universally applicable, but how these play out in my life may look very different than others. what i’m writing is not gospel, but one example out of many possibilities. take what works for you, and leave the rest!

there is a core teaching that underlies all personal finance that i practice, and that is money is something we choose to trade our life energy for [source]. this concept is articulated in the book your money or your life, as follows – we go to a place of paid employment to earn money in exchange for our time. our time, the hours we have on this planet, is our life energy because it is through time that we are able to be with loved ones, nourish our bodies and spirits, have hobbies, and do anything else that brings us enjoyment or fulfillment. every hour that we spend in paid employment is an hour we could have spent doing something else.

from this teaching, a inverse teaching is derived, and that is buying something is an exchange of our life energy. we trade our time for money through paid employment, thus money is a tangible representation of our life energy. we trade our money for various goods and services, and in essence these trades represent an exchange of our life energy for something else (food, a vacation, a house).

i think this is difficult to grasp, because in our culture we are disconnected from our money. we are not taught personal finance in schools, and we often hire out the management of our money to investment brokers and tax professionals. we also don’t always have a firm grasp on the basics – how much money we actually earn per hour in exchange for our time; how much money we have accumulated throughout our lives; how much money our family spends per year; on what and how we spend our money. money is something we know we need in order too survive, and of which we are always trying to make more.

monetary transactions are complex. rarely do we walk to our local farm and hand mr. farmer $10 in exchange for a bushel of apples. goods and services are processed through many entities before they reach us, the consumer. the apples may be grown on a farm five states over, processed at a facility that washes and waxes them, transported by a logistics company to a warehouse, distributed by a buyer to a grocery store, and finally stocked on the shelves by a grocer. we don’t fully understand all of this, but we do know that we can walk into any grocery store in america and buy apples with our dollars.

in this way, we come to see money as something real in its own right. now i’m not a conspiracy theorist and i’m not saying that money isn’t real, but money is a simplified symbol that allows us to conduct business in our complicated world. dollars bills themselves as pieces of paper are not worth anything. they represent a unit of exchange, and as such the value of a dollar bill is constantly fluctuating due to more complex processes we don’t fully understand like inflation, foreign policy, and market performance. in one instant the value of a dollar bill can change rapidly, as evidenced by history.

the good news is, to understand personal finance, we don’t need to understand all these complex processes. we as consumers don’t have control over these processes – we have control over ourselves and how we choose to spend our money (note:  when it comes to investing, i would advocate picking up some basic knowledge about economics). when it comes to thinking about money in our personal lives, we only need to worry about our side of the exchange – that our dollars represent our life energy. our dollars are not concrete items of worth in themselves, but symbols of time we have traded (life energy).

implicit in the teaching that money is something we choose to trade our life energy for is self-empowerment. we are in charge of choosing how to use our money, and once we get our finances under control, we can also be in charge of choosing how we trade our life energy.

there are many barriers to understanding this teaching. some of which i discussed above – the way money works in our country is confusing and obscured from the average person’s worldview. we live in a consumer culture that encourages unlimited “growth” – growing our wealth by making as much money as possible, and growing our lifestyles by purchasing new, bigger, and better possessions and services. we are exposed every day to a variety of advertisements encouraging us to buy this or upgrade to that. marketing isn’t just about selling a specific product – it works on a psychological level to create feelings of insufficiency, lack, and want. advertising tells us that we our only way to become whole and fulfilled is by using certain products or having certain experiences. we are encouraged to spend our money thoughtlessly.

we must break past these barriers and take a deeper look at our relationship to earning and spending money. we cannot accept the mindless consumerism that we are inundated with in this culture. our money should be spent carefully because it is a representation of our life energy, our most basic, human birthright, something that we all share in common.

i am an advocate of thoughtful spending and consumption. i am not a minimalist, and i’m not going to tell you to cut off your cable or sell your sports car, but i will challenge you to think twice about it. my goal in writing this blog is to help others develop a healthy relationship with money by connecting to value-based spending, or spending money through conscious choices that support our life values and vitality. when we understand how we allocate and use both our time/ life energy and money, we are able to develop habits that allow us to reach our goals. in my next post i will discuss one of my goals – financial independence.

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