Some people never quite learn that the possession of money does not, in itself, confer happiness. These types of people value money over family, and ethics. Sadly, examples abound of this kind of behavior. Owing money, on the other hand, produces stress and downright misery. Wise people recognize money for what it is: a tool for achieving one’s goals. Not having enough money limits people’s options, like a good education for the children or a reliable car to get to work.
In order to increase options and change financial habits with good decisions about finances, a person must first put the value of things into perspective. Valuing money and things over other people (also known as materialism) is a form of obsessive thinking. Materialism is about how much possessions matter, not about the possessions themselves. It is a problem for the rich and not-so-rich alike.
People considering their finances also need to recognize which of three life stages they inhabit: learning, earning, or returning. Learning about oneself and a trade occupies most people throughout their teens and early twenties (some trades, and some people, need longer). At some point, usually in their thirties, forties, and fifties, people focus on earning. Afterwards, they enter into the most rewarding stage of life, returning, in which they have the option of giving back to others.
The option of generosity, like other options, is curtailed by debt. Incurring debt for something that will appreciate in value, like a house or an education, is one thing. But going into debt for indulgences large or small is another matter. The easiest way to get out of debt is not to incur too much of it in the first place, even if that entails, at least for a time, a simpler way of life. It makes sense to make short-term sacrifices to have long-term options.
Having examined their attitudes toward money and material goods, and identified their current life stage, people are ready to move to the next step: designing and implementing a financial formula. I, like many others, chose the 10-10-80 approach: give ten percent, save ten percent, and live as well as possible on the rest. Note that implementation of this financial formula usually requires a budget in order to stay on track.
Oddly, the first thing people should do to live by their financial decision may be to become better earners. Books on finances are a good resource, but nothing takes the place of a good work ethic. This is more about desire than about knowledge, and is all too often extinguished by a belief that the effort is much greater than the return.
I would also like to recommend two other daily disciplines that should be taken into consideration when considering one’s financial state: to be thankful for what one already has, and to give as much as possible. The first maintains perspective while dodging envy. The second indulges and nurtures the best option of all, generosity.
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