“If I only had more money then I could _____”
I’ve had these thoughts, and I bet you have too. If only we could save X amount, we’d reach financial independence (FI) faster. If I could just make more money, cut more expenses, grow more food, or win the lottery (oh, wait, I don’t play)…
We devour money saving, money making tips and tricks. We read and research how to save more, make more, live frugally, invest, and pay off debt faster. And there is no doubt this knowledge is helpful.
But if you think of money as the answer to all your problems, you’ll get nowhere fast. If you give money all the power and control, feel deprived trying to get more of it, and define money as your saving grace, you’ll never win.
80% of success is psychology and 20% is mechanics.” – Tony Robbins
How we view money
Money as the goal.
If you are living paycheck to paycheck, struggling to pay the rent or buy groceries, it seems like more money would solve your problems. Money becomes the big obstacle in your life, the thing that you need but can’t seem to get more of.
You need more money.
But why do you need more money? When you take a closer look, money isn’t the real goal here, happiness is. Because paying the rent keeps a roof over your head and eating keeps hunger at bay – both create some degree of happiness.
I’m not denying that money can solve problems. It certainly can. But how you think about money affects how you use it.
Money can be seen as the necessary evil in your life or it can be something you strive for. Either way, having “more money” as the goal gives money all the power and control.
Money mindset
The mindset that we are at the mercy of our money is at the heart of many of our financial problems.
We give more power to money than it deserves. We let it control us. We attach emotions and feelings to it. We even judge people’s worth based on how much we think they have.
Let me restate Mr. Robbins quote in personal finance terms – 80% of success in personal finance is how you think about money and 20% is the actual numbers (and the actions you take to make those numbers work for you).
Money itself doesn’t create happiness. It’s a tool that, when used as such, can help create a life that leads to happiness.
Use money as a tool
A tool is “a device or implement, especially one held in the hand, used to carry out a particular function”.
Think about your tools. Do you know where your hammer, screwdrivers, and wrenches are? Do you keep them clean and organized, ready to use when you need them? Or do you just toss them aside, allowing them gather dust and get rusty?
If you neglect your tools, they will be worthless. Either you won’t find them or they won’t work when you need them most. But if you care for them by keeping them organized and clean, they will do their job beautifully when you need them – saving you time and energy.
What if you applied this concept to money? What if you took care of it as it came to you, kept it organized and ready to be used? What if you used it, as it was intended, to build things (savings, net worth) and had it ready when you need it most (emergency fund).
When you think of money as a tool, it becomes easier to use it for what you need. You stop thinking of cutting back on expenses as painful and instead see it as a way to create the life you want.
Your mindset shifts from feeling deprived and wanting more, to feeling in control and making conscious choices about how you use your money.
Use Your Money
Let’s continue the tool analogy. You don’t attach emotions to that hammer in your toolbox (right!?). When you use your hammer to pound in a nail, do you feel guilty or bad about it? Not likely. You are simply using the hammer as it was intended to be used.
Apply this to money. Money is meant to be used. You shouldn’t feel bad when you’re using your money. If you do, you need to seriously reevaluate how you’re using it.
As an example, Alan and I used the money we saved in our Digit account to pay for a recent vacation. Family time is a high priority for us. We had already saved the money for the trip, so instead of feeling guilt when we spent $100 on a seafood dinner, we were able to relax and enjoy the time with our kids. In this case, we were using money as a tool to create lasting memories with our family. (We use money as a tool to give us more choices and freedom as well – which is why we save and invest so much of it, in addition to intentional spending.)
What happens when you make the shift
Granted, it’s easy to view money as a tool when you have it. It’s harder to make the shift when so many of your problems seem money-related. And just because you shift your mindset and start thinking of money as a tool, your money-related problems won’t disappear.
But what will happen is you will start to take control. You will become more intentional about using your money and ask yourself how you can make it work for you. You will search for answers and strategies and more choices will become clear. Ultimately, you will start to take action.
Shift your mindset. Strip money of it’s power and control over you. Stop attaching emotions to an inanimate object. View it as it really is – a tool for life.
Love the analogies.
During my 20s I was more focused on my salary & my bank account balance. Now that I’m married and in my 30s I have realized money is still a very powerful tool but it’s the means to an end. It’s more of the hammer than the nail (now), you could say.
Right now, we are using as much of our income as possible to payoff our mortgage early. That way we don’t have to depend on money as much when we are debt-free. We’ll still use it to pay for vacations, plan for retirement, go out to out on Mother’s Day, but, it won’t be the crutch that it has been.
Thanks, Josh! There’s no denying, money is a powerful tool!
We use it for vacations and retirement too and, like you, we still rely on the income for the mortgage. We have a plan, though, and are trying to be strategic on the best use of our money right now. For the time being, we are using it to invest in real estate, but once we get that established, we plan to eliminate the mortgage.
My husband and I are trying to pay off our mortgage too! We figured if we have no monthly payment for housing, we’d be able to save faster, invest, spend on ourselves, and wouldn’t worry as much about being homeless should either or both of us lose our jobs.
LOVE this, Amanda!! I’ve been giving money way too much power lately. This is a very timely post for me – thank you!!!
Thanks, Laurie! Glad you found it useful. It’s so easy to give money the power. Sometimes it occupies too much of my time, energy and emotions too.
I disagree with Tony Robbins. I think money is 95% mental and 5% math. Great thoughts Amanda. We need to overcome the control money has over us, and view it like any other tool to truly win with it!
You’re first sentence threw me off, Brian! You disagree with Tony Robbins??!! But then I read on. And I think you’re spot on – it’s even more than 80% mental.
I agree 100% with your analogy. Since we’ve gotten serious about paying down debt and changing our lives we view our money as a tool. We’ve made some good progress by taking away some of the emotional connection with our income and realizing that wasting money while we still owe debts is a bad idea. Great post, thanks for sharing!
Ryan
Thanks, Ryan! 🙂 It’s hard to separate money from the emotions sometimes, but when you do, it’s amazing what you can do and how your life can change.
Yes, Amanda! See, there’s a reason why I landed on this post today. I just posted about money mindset and this is something I really think needs to be explored more. After all, like you said, there’s so much info about paying off debt, making money, and saving – yet there is still an underlying issue. It has to be addressed!
Thanks, Latoya! Great minds think alike! 😉 It’s an issue I think about a lot. There is so much information about how to pay off debt, save more, side hustle more, etc. But until you come to terms with your relationship with money, change can be difficult.
This is so true. I agree with you and Latoya as well – We need more conversations about how we view money. It’s indeed simply a tool, which means we have to know what we’re building and WHY we are building it in order to view (and use) money correctly. Else, we’ll spend our lives chasing more money only to look back and wonder if it was all worth it.
“Else, we’ll spend our lives chasing more money only to look back and wonder if it was all worth it.” You hit the nail on the head, Will! That WHY is a huge part of making lasting changes, especially when it comes to our money.
You’re so right Amanda – we DO give too much power to money, and attach too many emotions to it. I am trying to remember that right now. May is a crazy month for me with family birthdays and summer camp expenses. Plus I am traveling to celebrate my sister’s 50th birthday – something I never would have done right now because of money. But I am taking money out of my savings account and just trying to remain calm in the knowledge that this is what that money is there for. At the end of the day it is only a big deal if I make it a big deal. June is for rebounding.
Yes!!! That’s the perfect example of using money as a tool. Going to celebrate with your sister on her big day is a great use for savings and I’m certain you won’t regret it. Creating memories with family is one of my favorite ways to use money. Last weekend, my daughter and I had a free evening and I asked her if she wanted to hang out with me. She wanted to go out for sushi – best $40 I spent all week! 🙂
Great post! Haha, your first line made me think of some country song- ‘If I had money, I’d tell you what I’d do: I’d go downtown, buy a Mercury or two…’
Thanks Daniel! Now ever since I read that I can’t get that song out of my head (Alan Jackson I do believe!?). 🙂
Good point about how we take care of tools we want to have ready at our disposal. The metaphor definitely extends to money! I know we have been able to say yes to more opportunities because we had savings, a solid income, and spending under control. We’ve been able to travel, have me stay home with the kids, give to charity, and even go on overseas mission trips. Money is definitely a useful tool.
Thanks, Kalie! When you take care of it, you definitely have more choices and opportunities. Your family is the perfect example of this!
This is a great write-up, Amanda! Money definitely had control over me when I was in college and when I got my first job. I would somehow find a way to spend every extra dollar in my account, which often led to overdrafts (and fees!)
My wife (girlfriend at the time) taught me the importance of saving into an emergency fund. The sense of comfort and security of having money in an emergency fund made me start to change my money habits. Now, we’ve built up a nice emergency fund and we save aggressively. We are cautious with our spending and try our best to spend money only on things that make us happy 🙂
Thanks so much, Taylor! 🙂 Sounds like your wife had quite the impact! Once you experience that sense of relief and less stress of having money in the bank, it really helps you realize the benefit of good money habits. It’s great that you guys are getting such a great start at your age. It took us a little longer to get those good habits established.
Great post Amanda!!! I use to think that money held a bunch of power but as I get older I see that money is neutral and it’s individuals that give it power. At this point I am trying to learn to leverage money to enjoy myself more and outsource things that I don’t want to do. In turn, it’s powerful for allowing me to free up time in order to pursue the things that I’m passionate about.
Thanks, MSM! Yes, it’s individuals that give money it’s power – great point! You provide a perfect example of how to use money as a tool – using it to create more time to do the things you love. What’s better than that!?
I like what you say here: “Stop attaching emotions to an inanimate object.” We recently had the experience of a “tax surprise”. My husband is self-employed and often drowning in all of the accounting he has to do, so mistakes happen. Anyway, it was such a relief to be able to deal with it. A minor “Ugh!” instead of a major stress. The difference? We had our “tool” of savings for the unexpected. We used that tool, and there was very little emotion connected to it. Great post, Amanda!
It’s so easy to attach emotion to it when those “surprise” expenses pop up. I still find myself doing it from time to time – before I remind myself that’s what the savings is for! Kudos to you guys for having that tool at the ready! Thanks Ruth!
This is SO Great Amanda! Love the tool analogy. It isn’t until you put your money to work for you that you really understand it’s full usefulness. Prior to that I think it’s easy to feel used by it instead. Thankfully I figured this out a few years ago!
Thanks, Amy! 🙂 Yes, taking control and making it work for you is the key to making it useful, that’s for sure. I’m grateful we finally figured this out too – if only I knew then what I know now…
Money is an extremely useful and important tool, but at the end of the day it’s just stuff. And stuff doesn’t matter, people matter.
For me it’s now a means to an end, not the end itself. I’m still probably too focused on money, but I*think* it’s in the right context at least.
“And stuff doesn’t matter, people matter”. Right on, Ty! 🙂 And it’s so important to remember this each day.
Yes, money is a means to an end for me too…it’s not the ultimate goal, but it helps me get there.
I’m going to be honest with you: I would hesitate to take anything Tony Robbins says too seriously.
In this case, it’s sound. Still, I’d go with Einstein:
“Compound interest is the eighth wonder of the world! He who understands it, earns it. He who doesn’t, pays it.”
The wonderful thing about that quote, like most Einstein or Twain quotes, is that it’s *probably but not provably* a misattribution. But look how much more intellectual integrity it takes on!
Congrats on digging yourself out of so much debt, btw.
Thanks, Phil! That’s a great quote from Einstein, thanks for sharing. Compound interest is a magical thing for sure. 🙂
I love this! We always talk about money as a tool, but we never really play out what that ultimately means.
I do think it is important to remember of money as a means to happiness. It is easy to get caught up in the money aspect of it and forget the end goal of the whole endeavor.
Thanks, Matt! Right on – remembering that the end goal isn’t money is soooo important! 🙂
Great post! I’ve always heard that money is a way of keeping track, but not the way you will become happy. Learning to use money is the greatest way to achieve success. And when I say “use money” I don’t mean, using debt to leverage additional purchases. I’ve noticed that when I’m living within my means and using money as a tool, my stress levels decrease, I’m happier and ironically enough, I always have money.
Thanks, Amy! You make a great point about the decreased stress levels and increased happiness. It’s that feeling of being in control that will do it. It means you’re using your money in ways that are in line with your life priorities and values! Thanks for the comment!
I have heard that saying so many times! “If I just had more…” But that won’t solve anything if the mindset is not behind it. People finally get more money either in a pay raise at work or a tax refund. What do they do? Squander it and go on vacation or buy some frivolous thing. Instead they should use that to better their situation by paying off debt or adding to their emergency fund or investment account. More money = more spending power to most. At high levels of income and spending, it makes the debt levels even greater if they can’t keep up. Mindset is a huge factor in the personal finance game. Thanks for sharing.
Yes! I completely agree. For many people, more money isn’t the answer to the problem. I have an acquaintance who won tens of thousands of dollars gambling (which is a whole other issue). It was significant enough that, if he would have used it to his advantage, he could have set himself up for a much easier financial future. But, within a year it was all gone. Two cars and who knows what else. Shifting that mindset to make the money work for you, rather than always being at the mercy of the money is a huge step in the right direction.