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Becoming Comfortable With Money

It has always amazed me how uncomfortable some people are in discussing the topic of money.  My guess is that is because of how they were – or were not – exposed to the topic.  Growing up I saw my Dad and Mom work hard.  They were not frivolous with their earnings.  They bought good quality things and took care of them.  They spoke to us about the importance of saving and the cost/value of things.  The topic was neither taboo nor all consuming.  It simply “was”.  We received an allowance, were encouraged to save, and were taught to question when we wanted to buy something.  However, the ultimate decision on how to use our dollars was left to us.  That is because they recognized that we needed to understand what we could and could not do with money.  We needed to understand that it provide us options.   Sometimes we made good choices.  Sometimes we made poor choices.  However, we learned through our choices and became comfortable with the topic.  Both my brother and I are quite comfortable with the subject and have been able to put money to work for us to achieve our personal goals.

The reality is money is a critical part of life.  There I said it.  I broke the taboo and actually admitted that it is important.  Now I did not say it is the most important part of life, just that it is a critical part of life.  And anyone that does not recognize this fact is, in my opinion, very foolish.  Money is one of society’s greatest gifts.  Once created, it provided a medium of exchange.  This mechanism allowed us to move beyond a system of basic barter and to develop specializations in business where trade could take place via this new mechanism.  The result has been absolutely amazing as mankind has achieved incredible things that would never have been possible if money had not been developed.    When it comes to money I would offer the following as the “Laws of Money”:

  • Law 1 – In the short term, time can be traded for money and vice versa.
  • Law 2 – It is always possible to create more money. It is never possible to create more time

These two laws have a couple of key implications:

  • We control how we spend our time; and, in turn, how we acquire or spend money.
  • Ultimately we will run out of time no matter how much money we acquire.

If you can come to terms with these two laws and their implications, you will be ahead of the vast majority of people.  There are four steps that you can take to allow these “laws” to work for you as opposed to against you.  They are:

  • Understand what money is and what money is not. Money is simply a medium of exchange.  In and of itself, it is not anything.  It is neither good nor evil.  It simply allows us to exchange an agreed upon medium (i.e. money) for a product or service.  These products or services allow each of us to live our lives as we see fit.
  • Understand what you want to achieve in life and how you need money to help you achieve this. As money is a medium of exchange it has the ability to help you or hinder you in the quest of your life’s objectives.  However, you must first define your objectives to ensure that the exchanges you are pursuing are consistent with your life’s purpose.
  • Understand how to manage it so that it does not manage you. As you will be using money to conduct these various exchanges, you had better understand how to manage your money.  If you do not, you will be prone to make poor exchanges and likely fail to reach your objectives.
  • Practice spending money.  While, as in any field, there are some “naturals”, most of us are not born understanding how to manage our money.  We only develop this skill through practice; and, often that practice involves failures.  However, each failure provides us with teachable moments that allow us to become wiser and make better future choices.

So how do you do put the above four steps in action?  By doing the following:

  • Clearly define your goals. As money is a medium of exchange, you need to first make sure you know the objective that it is supporting.
  • Get disciplined in tracking your spending and saving. As the old expression goes, what gets measured gets done.  I have seen it time and time again — simply recording how you are saving and spending will influence your behavior.
  • Find a partner to talk about your spending and goals. That partner can be a friend, a spouse, a financial advisor, or someone else.  Taking the time to discuss the topic will allow you to become more comfortable with the topic AND get the wisdom of another person.
  • Stop worrying about making mistakes. Nobody is perfect and things are going to go wrong.  However, if you take the first three steps, you will likely be surprised at how quickly your spending habits start to align with your goals.  Yes, there will be setbacks along the way; however, mistakes are the best part of life as they provide us with opportunities to learn!

When you get comfortable with money, it allows you to quit worrying about it and focus on what is important to you in life.  And THAT is what makes money important – when understood and used properly, it provides a means through which we are able to more easily experience and enjoy life.

Hopefully the above has provided you with a few thoughts on how to improve your relationship with money.  Finally, if you have any questions about the topics covered in this article, feel free to reach out to me at any point in time.  I enjoy working with entrepreneurs, corporate executives, and families to define their goals and make sure they have plans in place they are executing to achieve those goals.

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Curt Stowers

Curt Stowers

Curtis Stowers helps individuals and families across the United States grow their financial assets, particularly in the Naperville, IL region. He is a Certified Financial Planner, holds a Ph.D. in Industrial Engineering from the University of Illinois, and is the founder of F5 Financial.