It’s not that I’m against any of these things or that I’m against spending money. Instead I’ve been investing my money in different ways.

When I look at the current state of our economy – especially growing personal debt and low credit scores among consumers – I often wonder what psychological factors are driving this behavior.

Maybe you read “revolt against money” and immediately thought, “Hell yeah – let’s do this! Money is evil, and we need to get rid of it – it’s ruining people’s lives.”

Or maybe you read the headline and thought, “Revolt against money? That’s ridiculous – money is what makes the world go ’round! We need money to survive.”

There’s no doubt about it – people have very strong beliefs about money.

I’m no different.

And throughout my meanderings into the blogosphere, I come across many different opinions about wealth and money.

• Some sites about money are scams, playing on people’s desires, promising you fast, easy, and effortless cash.
• Some sites about money just criticize those who try to make an extra buck writing e-books or doing coaching.
• Some sites about money proclaim the virtues of minimalism and relinquishing our desires for material possessions.
• Some sites about money proclaim the virtues of consumerism and the luxurious lifestyle.

I believe all of these extremes can reflect unhealthy beliefs about money. Rarely do I find a perspective that seems properly balanced (but I’m sure they exist…somewhere).

And I’ve written about these concerns before. In my post Money on My Mind: Tips for Financial Wellness I cite a declaration made by certain psychologists saying that our attitude about money is an often neglected factor to our happiness and mental health.

There are people at both extremes: those who worship money, and those who run away from it.

Of course, not everyone is at one of these two extremes, but from my personal experience many people unhealthily favor one side over the other. Here are some ideas I have to help cultivate a more balanced viewpoint that I find is more sensible and practical.

Money isn’t everything – no #$%!

One of the most common criticisms against money is that it “isn’t everything.” This is so glaringly evident to me that I wish I (and many others) didn’t feel the need to always say it (yet, here I am writing about it).

Yes, money isn’t everything. But that doesn’t automatically mean it has no value. My legs aren’t everything, but if I had the choice to have legs vs. not have legs – I would damn sure choose the legs!

In the real world, people are the same way with money. Most people when presented the choice to have more money vs. less money (all things being equal) will choose to have more money. Why is this?

Money can fulfill some of your values.

Okay, money can’t by itself buy you love or happiness, but it can fulfill some values in your life and other people’s lives.

At the very least, we understand that money is often necessary to provide food, shelter, and clothing – basic necessities. Let’s get that point out of the way – it’s moot.

Regardless of how much our basic needs are already satisfied, people will almost always choose to have “more money” over “less money” (all things, time and work, being equal). This is because money continues to satisfy values for us even when our basic needs are already met.

Yes, I get it – now that we have more money we can buy a new Xbox, or iPod, or Corvette – but that’s not the kind of value I’m talking about either.

Wanting more money doesn’t have to be a purely selfish thing. Money can be used to help others. You can donate to charities, organize a community event, invent something, fund scientific research, start a business, lend to a friend, or buy something from a local business and help your city’s economy, etc.

Money is just a tool that facilitates an exchange in value, but it is up to you to define the values in life that you want to support.

So one individual having more money than someone else can still be a net gain for all of society – it all depends on how that money was spent or invested.

I’ve said it before on this blog that I have very clear plans for making money throughout my life. Not just through this site (which I am currently in the process of monetizing), but through many different endeavors that I hope provide value to others.

And once I have money and I’m comfortable, I don’t just plan on splurging my earnings all on myself. I want to be a philanthropist. I want to be very active with charities and volunteer work, because I think those kinds of activities fulfill the deepest values for me (but they are values that are not OUTSIDE the context of “money” – money helps make those other values happen).

Why you shouldn’t get upset when your favorite blogger starts selling a product.

I mentioned earlier how I’ve been meandering through the blogosphere. I came across two posts within the past 24 hours that really irked me. I’m not going to bother linking to either one, but both basically said how online writers and bloggers who try to make money off their sites are doing a disservice to society.

Information and words, I am told, should always be free.

This poses a problem in my opinion.

If you enjoy a blogger, and you are educated and inspired by their writings, why wouldn’t you want them to be able to make a living doing that? Why would you subject them to have to also maintain a day job on the side, which only detracts that person from devoting more time doing something you you enjoy and receive benefits from.

I think the root of that “shouldn’t make money!” attitude is destructive. Not just to the person who wants to make a profit, but also to the people who enjoy the work and service they receive from that individual.

Keep in mind, in any voluntary marketplace, online or offline, you don’t have to buy anything you don’t want. No one is forcing you to buy their e-book, or their webinar, or their coaching. But if other people want to pay money to receive these things (if they perceive them as “valuable” enough to spend money on), then who are you to call the exchange illegitimate or evil or immoral.

This doesn’t mean there should be a price on everything.

Look, I’ve made it clear that I have intentions for making money on this site. I’m very open about that to anyone who asks me. But that doesn’t mean that everything I do here is solely driven by a profit motive. I genuinely enjoy writing about the things I do and interacting with like-minded people. I would still write about these things even if I wasn’t making money (although I definitely wouldn’t be writing about them as often).

If there is any proof of my dedication, it is the fact that I’ve written over 300 articles on this site and I’ve never charged anyone a single cent to read any of them. I don’t believe that everything needs to have a price-tag. And from my own research and experience, I’m actually discovering that giving away value (with no strings attached) is actually a great business model in the long-term.

I think – as a general trend – most businesses (especially online) have the incentive to offer the most value to their audience at the lowest and most reasonable price. In the end, I see these exchanges as a win-win for all parties involved.

I just wanted to get that off my chest.

I just wanted to get these things off my chest. I know I’ve written about some of these ideas in the past, but I’ve seen a lot of criticism lately and I wanted to clarify my point-of-view one more time (although it probably won’t be the last).

No, I don’t have an affiliate link to share with you, a product to sell, or even a link to my newsletter in this post.

I just wanted to voice my opinion – and you listening is all the value I needed in return. I appreciate it.

Questions.

• What are some of your beliefs about money?
• Do you think money is a net gain or net loss for society?
• Are some of your beliefs about money affecting your own career choices and spending habits?

Please leave a comment below!

Below are a list of beliefs that I find are conducive to healthy money-making. Some of them address our attitude toward money, while others are just useful tips or reminders on how to be a smarter producer and consumer of wealth.

• Money is a tool that can be used for either good or evil.
• I can make money and still be a moral person.
• Some money and material well-being are necessities of life.
• I need not feel envious of those who make more money than me.
• I need not feel guilty when I make more money than others.
• I can get paid for doing things that I love.
• I understand that there are other values in life than just material well-being.
• I have the physical and mental resources to be financially abundant.
• Raising my expectations about money can motivate me toward better behaviors.
• I can be a smart shopper by avoiding spending biases and not buying things I can’t afford.
• I’m open and willing to give charity to the less fortunate.
• I am capable of providing for my family.
• I’m always open to new job opportunities and income streams.
• Imagining myself in the future is a great way to curb wasteful spending in the present.
• I will stop buying over-priced main brands and choose cheaper substitutes.
• If I know what I want, I’ll shop around online for the best offer. For example, I’ll search “[Product] price comparisons” on Google to see what is available.
• When appropriate I will also check for used prices on craigslist, Ebay, or Amazon.
• I will avoid growing debt like the plague by making small changes in my budget immediately.
• I’m willing to invest in products that may save me more in the long-run, such as energy efficient appliances.
• I will shop more often at thrift stores, garage sales, and flea markets.
• I will buy large quantities of products I use a lot.
• I will maintain a separate savings account for vacations or luxury spending.
• I will also maintain an emergency fund for unpredictable and unfortunate times.
• I won’t be a hoarder. I’ll sell stuff I no longer use or value.
• I can walk or ride my bike to save on rising gas prices.
• I can talk to and learn from a friend, family, or coworker who I look up to financially.
• I can learn how to negotiate and strike bargains.
• If I have a skill or hobby, I can try to turn it into freelance work on the side.
• I reject consumerist philosophy. I don’t buy things just to show off to my friends or neighbors.
• I deserve a financially successful life.
• What I accomplish with my money is more important than how much I make.
• Being busy is not the same as being productive.
• Savings are the key to financial growth and stability.
• I won’t necessarily limit myself to just one career or job.
• Exchanging value with others is a great way to create more wealth for everyone.
• I’m not afraid to take some financial risks every now and then.
• I’m open to financial opportunities that I haven’t even yet thought of.
• It is healthy to enjoy luxurious expenditures every now and then.
• I can save money through Do-It-Yourself projects.
• I’m more valuable than my net income.
• I’m always looking for new ways to be productive and creative.
• I have friends and family to support me during times when I need financial help.
• I can get paid for being me. I’m incalculably abundant.
• Difficult financial times will always be temporary. I will learn from my mistakes.
• I reap what I sow. When I create value for others, I get value back in return.
• I surround myself with a rich network of successful people.
• I will stay focused on what drives income and build off of those experiences.
• I will not let money run my life. I will maintain a healthy balance.
• I will not settle for a monotonous job that doesn’t fulfill my interests or passion.
• Financial wellness is a constant work-in-progress.
• When I recognize value in myself, I allow myself to make the world a more abundant place.

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Klontz and Klontz suggested a range of possible money-related disorders in their book Money Over Mind. These included money-worshiping, rooted in the belief that more money provides the answers, which can lead to such behaviors as overspending, compulsive buying, unreasonable risk-taking with money, pathological gambling, hoarding, and workaholism; and money-avoidance, which includes “behaviors such as financial denial, where denial is used to defend against or minimize money problems, or financial rejection where feelings of guilt or unworthiness are associated with money.” Avoidance disorders can also include under spending and excessive risk-aversion.

Apparently almost 30% of young adults between 18-25 are experiencing some kind of mental disorder, this is the highest rate ever recorded. Of course, many of these same individuals are just graduating from college and entering into a depressed marketplace. Psychologists are right to wonder how these current economic conditions may be contributing to our poor mental health.

Financial wellness – a component of well-being.

As someone who fits into the statistic mentioned above, I can certainly say that my financial life has been less than satisfying over the past two years. It has also spilled over into others aspects of my life, like relationships and going out to social gatherings. These can definitely pay a toll on our mental well-being. It is important to acknowledge that a balanced life must include proper (and sane) management of our finances (including a sustainable income). I can only imagine the stress of those who are going through similar troubles, but also need to support a family. Such a situation can become really mentally draining and affect all aspects of one’s life.

The right attitude about money.

I’ve thought a lot about money over the years and I’ve come to the conclusion that it shouldn’t be seen as neither “good” nor “bad.” Money is just a tool we use to exchange value with one another. But like all tools, it can be used properly and it can be used really poorly. Some of us have a lot of money, but when we spend it impulsively and with only short term gratification in mind, we can often find ourselves less happy with what we have in the long-term (perhaps due to wastefulness and gluttony). This is similar to what Klontz and Klontz called “money-worshiping.” At that point, material well-being can be like a drug.

At the same time, completely avoiding material needs can be unrealistic and just as unsatisfying. I think some of us witness greed in the world, and then we overcompensate by fostering a completely negative attitude regarding money. We see all action focused on making money to be bad, maybe even evil. A balance needs to be met by coming to terms with our material needs without clinging to them.

Avoid spending biases.

Debt is one of the biggest problems when it comes to financial wellness. People either buy a lot on credit or take risks that they think will have big financial return, but don’t. Thus they find themselves in a hole, paying interest on enormous debt as time continues to tick. It can feel like a prison.

Of course the best way to avoid debt is to not go in debt in the first place. This ultimately boils down to having smart spending habits. The trouble is many of us hold cognitive biases that hurt our wallets. Hopefully by being more aware of some of this irrational decision-making we can avoid making these mistakes:

Status quo: We stick to buying what we know instead of pursuing alternatives.

Relativity trap: We notice a product is on sale 20% so we feel more compelled to buy it even though we never really needed the product in the first place.

Sunk cost effect: Instead of cutting our losses short, we often hold onto poor investments hoping that they will bounce back. This is a form of loss aversion: our tendency to prefer avoiding losses over acquiring gains.

FREE!: Humans tend to be very allured to anything that is “FREE!” and can often make irrational spending decisions to get something for free (ones which end up costing them more in the end). There is a great chapter on this in Predictably Irrational, an excellent books that explains some of the hidden forces behind consumer behavior.

Restraint bias: Humans tend to overestimate their self-control regarding spending. One thing we can do is avoid getting ourselves in tempting situations or environments that encourage us to buy something new.

Post-purchase rationalization: This bias describes our tendency to backwards rationalize our decisions after we’ve committed to them. Sometimes marketers use “Money Back Guarantees” knowing that instead of regretting a purchase we will usually find a way to justify it to ourselves.

Imagine yourself in the future.

A recent study published in The Journal of Consumer Research has suggested that by imaging our future self we can curb present spending and save more for the future. “The willingness to forego money now and wait for future benefits is strongly affected by how connected we feel to our future self, who will ultimately benefit from the resources we save,” writes Daniel M. Bartels (Columbia Business School) and Oleg Urminsky (University of Chicago).

If we can place ourselves in a bird’s eye view of the future (especially when making financial decisions), we can often become better planners for our future retirement by seeing the “bigger picture” of our habits.

Don’t buy stuff you can’t afford.

One of my favorite Saturday Night Live skits with Steve Martin. Just commonsense hilarity about not buying stuff you can’t afford. This seems more relevant now than ever before.

Remember money isn’t everything.

Money, of course, isn’t the only value in life. We also need good health, relationships, a meaningful life, among other things. Money and well-being does show some correlation up until $75,000 a year, but after that point money shows no significant effect on increased well-being. It’s important to remember that someone who is rich can still be miserable, and someone who is poor can still find happiness. Money is just one of many conditions that contribute to our well-being. This doesn’t mean we should ignore it; instead, we should try to maintain a balanced perspective.