Fight Interest

When you ask someone, “What is money?”, you’ll often get slightly different answers. Most young people will answer that money is what you use to buy things (or some variation of that). But as you learn about money, you’ll come to realize that it is much more than that.

A Bit of History

Throughout history, we have used bartering as a way to get what we want or need. Bartering is merely trading a good or service for a good or service. If you wanted some new shoes you might perform a service to buy the shoes from the shoemaker. The more you want or need, the more you’d have to trade to get it.

The barter system is still in use today, but it isn’t always convenient to find someone who has what you need and wants what you have. You can thank the Chinese for inventing the concept of money. Money is a stored value that is acceptable to everyone. Over time, money has taken different forms. When you hear the word money, you probably think of the green paper bills we use in the United States.

Money and Emotions

Beyond its physical form, money has an emotional side. When you hear the phrase Bank Reconciliation, do you feel anxious or afraid? Or was more of a feeling of frustration? Is it the math or the money?

Yes, making decisions about money often involves math. Please don’t let that stop you from making the best decision! Use a calculator or a software program like Quicken or Microsoft Money, but don’t make poor decisions out of fear. Every time we make a poor money decision, it costs us. I’m sure you know making money takes work. When you waste money, you have to work that much more to get what you need or want.

Fear isn’t the only emotion that negatively affects money. Pride and envy are also bad emotions when it comes to money. When someone sees someone else get a cool new toy, such as a phone or car, they want one too. This is a natural feeling. When people make these envy purchases it is referred to as, “keeping up with the Jones.” Succumbing to this impulse can create a financial nightmare and destroy any progress you may have made on your money journey.

The Money Journey

I call it the money journey because financial success is much like any trip you take. When you take a trip, you usually have a destination in mind. And in the instances where you don’t know how to get to a place, you’ll need a good map and directions (hopefully that is where this blog comes in). Finally, just as the terrain and weather can change during a trip, the rules of money can change. You can’t be complacent or you may lose your way.

If you take nothing from this blog, please remember this: In the quest for financial security, knowing how to manage money is just as important as knowing how to make money.