Why do you want money?

I’ve been thinking a lot recently about my relationship with money and the way that it affects my life.

When I was growing up I wasn’t all that interested in money.  Whenever I was encouraged to get a part time job during my youth, I would resist it as much as possible because I knew that the time that I would lose was far more precious than the things that I could buy with the money that I earned.  However, when I did have money I would start dreaming about what I could buy with it and could get lost in ideas of a better, happier life with more physical possessions.  Time and time again I experienced the reality of money though.  Every new purchase would create an immediate sense of excitement and provide a lot of pleasure, but it always faded away without providing real happiness.

As I got older however, I had to start fending for myself and so at the very least I needed to start earning money to provide for my basic needs.  This is where things started to get muddled.

Meeting our basic needs

Like most animals, as humans we need food, water and shelter as a minimum, but we live in an environment where we rarely obtain these essentials directly from nature, but instead can only obtain them by trading “coupons” for them (aka money).  So we are forced to do work that often has nothing to do with what we are trying to achieve, just so that we can get some coupons to exchange into the things that we really do need.  This very indirect method of attending to our own basic needs is both bizarre and complicated, but it does work.  The problem with it however is that it becomes very very easy to forget what the original purpose of earning the coupons was.

Instead of doing work to efficiently earn enough coupons to meet our own needs, collecting the coupons becomes the goal itself.  We start trying to obtain as many coupons as possible, believing that the more coupons we have, the better our lives will be.  If we are lucky (which most westerners are), we end up with more coupons that we actually need.  So our attention turns away from our basic needs to deciding what we can do with our excess coupons.  We start to dream of a life with more stuff, better stuff and more luxurious and exotic experiences.  These dreams become the focus of our life and the reason that we go to work every day.

So what’s wrong with that?

If we can afford to make our lives more comfortable and enjoy more luxuries, why should we refuse ourselves that opportunity?

Looking at it from a personal point of view and ignoring the environmental and social implications of material consumption, I don’t think that there is an inherent problem with enjoying modern comforts.  The real problem is that once we attain a basic level of material comfort and have all of our essential needs taken care of, having more money and buying more stuff does not do anything to increase our happiness, but we start to believe that it will (even if we claim otherwise).

Working for money becomes our normal way of life.  Even if we realise that money doesn’t bring us happiness, we believe that “we have to go to work anyway, so might as well earn as much as possible and enjoy spending it”.  It sounds like a pretty flawless logic on the surface, but wait a minute – did you just say that “you have to go to work anyway”?  Suddenly it becomes apparent that the perspective from which we view our own lives has become highly distorted.  We have confused the requirement to do some work in order to earn coupons that we can exchange for essentials, with the requirement to work full time (however you define that) and make it a central element of our lives.

Re-framing the question

To illustrate the problem, my wife and I keep having conversations about whether we should convert our loft or buy an electric car (see my recent post about that).  Although both would be nice, I can’t bring myself to do either because they both cost a huge amount of money.  The argument in favour of these plans is that if we can save up enough money then there is no reason why we shouldn’t do them.  I had been struggling to counter this argument but my gut told me that something wasn’t right.  Until a few days ago when the answer struck me and the question was turned on its head.

“What would you rather have, an electric car or a year off work?  A loft conversion, or a year off work?”

For both of us it was a no brainer.  We would take the year off work in the blink of an eye.

Most people don’t realise that if you have spare money, you don’t have to spend it on “things”.  You can spend it on time.  Time to relax, to think,  to talk, to travel, to exercise, to volunteer, to explore your interests, to sing,  to dance, to write, to draw.  Time to be yourself and explore your true passions in life.

It is easy to say that this only applies for large amounts of money, but I disagree.  When I was in my late teens I had a job in the cycle department at Halfords, paying about £5/hour.  Many of the staff would go next door to buy lunch from Sainsbury’s (e.g. sandwich, crisps and a drink), but I never did because I knew that if I spent one hours pay on my lunch then I would effectively have to spend an extra hour standing around in the shop just to earn my lunch.  Why would I do that when I could make a sandwich at home for next to nothing and bring it with me (in my case, it would actually cost nothing because I was eating from my parents fridge).   In short, making my own lunch instead of buying it outside would earn me an extra hour of life to enjoy doing what I wanted.

Review your own relationship with money

Take a step back and look at your own life with fresh eyes.  How much stuff do you really need to survive and be happy?  Do the maths!

Write down all of your essential expenses in one list (rent/mortgage, home maintenance, energy and water bills, essential food, essential clothing, essential transport and other liabilities like taxes and insurance.  Then write a second list of any extras that you feel you would need to buy to be truly happy, including only those things that enable you to thrive as a complete and fulfilled human being (most likely these are the essential costs of your favourite hobbies).  Now look at the two lists and compare the total of those expenses with your actual take home earnings.

If you’re lucky enough to have earnings significantly above your essential life expenses then you have an opportunity to buy yourself time, switch to a lower paying but less stressful job or to invest in improving your physical and mental health.

Get perspective on what you really want in life and how much money you really need to achieve it so that you can make more informed choices about the work you do and the things that you buy.  As much as anything, this post is a reminder to myself of the value of time.

Life is really short, do what really matters. You won’t get a refund…

 

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Posted by Tom Greenwood on 27 July 2014