Money is a loaded topic. It carries a lot of emotional baggage for many. It is useful, but can also be destructive if utilized in harmful ways. It can be kept, spent, or given away. There are so many choices with what to do with it. I think one thing that has shifted within me in terms of my mindset on money is thinking of money as a tool to get what I want from life. Instead of seeing it as a roadblock, or as something to accumulate and collect, I see it now as something to earn, use, and trade for things I truly value.
Something that has helped me is learning to spend my money on what brings me utility and enjoyment in life. I am starting to more systemically strategize my own financial plan. Before, I would have a nebulous, and often frustrating goal of earn more, save more, spend less. Now, I am breaking this down and making it more concrete via online calculators and the old nerdy standby of Excel spreadsheets.
Seeing things laid out before me in my financial plan has helped me shift how I see my weekly and monthly expenditures. I am eager to create some breathing room between my necessary expenses and what I have accumulated in the bank. I get satisfaction from my job, but at the same point, I do not want to be forced into a working position where I have to work to pay the bills. I think this shift in mindset has helped me start to spend my money more meaningfully, and use money again as a tool to reach my life goals and my financial goals.
The book, Your Money or Your Life, by Vicki Robin and Joe Dominguez, highlights this in the idea of analyzing what you have spent. After you tally what you are spending in each category in your life (e.g. housing, groceries, restaurants, hobbies), you can then analyze each spending category by giving it a grade – whether it is right where you think it should be, whether you should be spending more in that category, or whether you should be spending less. I found this idea really helped me start to spend my money strategically, and feel less guilt in spending on what I think is important to me.
I hope to also teach good money habits to my children, via how I spend my own money and how I speak about money. As my children get older, I hope to show my children how money and wealth are a tool to be used, and also how this fits into the bigger picture of the economy of our neighborhood, our city, our nation, and our world. The book Silver Spoon Kids, by Eileen Gallo and Jon Gallo, had a very interesting chapter in it describing how a huge chunk of the nation’s wealth is concentrated in a very small percentage of the country. It offers the idea to do an exercise with your children dividing up 10 cookies among your children, to illustrate the distribution of wealth in the country. As described below in terms of the breakdown in wealth, what happens is one child gets several cookies, another few children get also a fair distribution of the cookies, and the majority of children are forced to break up and share a tiny portion of one cookie. This is astounding, heartbreaking, and eye opening. This book was published in 2000, so I suspect the statistics on the distribution of wealth in the United States have probably gotten even more lopsided.
But according to Silver Spoon Kids, around the time the book was published (2000), 40% of the wealth is in the upper 1% of the population, 30% of the wealth is owned by 2-10 percentiles, 29.8% is owned by the 11-60 percentiles. And the bottom 40 percentile of the population owned only 0.2% of the nation’s wealth. This is crazy to think about. And I am sure this trend may continue. I think that part of the book really gave me pause and think very differently about money, wealth, and how it is utilized as a society and an economy.
Money is valuable, but I see that it is simply a tool in life. As described in the book Your Money or Your Life, you are trading some of your time or life energy for your paycheck. You can then use this money from your paycheck to go to the stores and get other things you want in life (e.g. groceries, a roof over your head, a new set of headphones, a tank of gas). By using it more deliberately and carefully, I hope to be trading my time during my work for something I truly want. This is a work in progress, of course, but I hope to continue to get better at spending my money wisely. And I also hope that by leading by example, I can teach my children how to use money wisely, too.