Often times, the first experience people have with money is the tooth fairy, receiving an allowance or even birthday money. These are common interactions that start to determine how people value and understand money. Money is a universal means of motivation, whether it is for getting kids to complete their chores or employees to work harder to receive a bonus. As a result, people may develop negative relationships and habits with money. Here are some common misconceptions about money and ways to change the relationship from a negative to a positive.
Money creates happiness. Money is not a determining factor in happiness, How we feel internally should be the main factor. Often times people will strive to buy a new car or home and think that because we have the money to do so, that is what makes us happy. However, what is really making people happy are the memories that are being created in a home or at the places that can be explored with a car. In order to change the relationship with items as a means for happiness, we must first analyze where our happiness genuinely comes from and start to embrace those moments.
Money is a scorecard. While money is a motivational factor and can inspire people to work hard and get tasks done, that should not be misinterpreted as money determining one’s self-worth. Self-worth and net-worth are two different things. If someone makes less money than another, that does not mean they are less of a person. What truly matters is internal happiness. Focus solely on personal financial status, promotions and expenses, and ignore what others are doing.
Money is short-term. The idea that money is short-term refers to the concept that people never have enough money to accomplish the things they want. However, money is a long-term relationship and should be treated and valued as such. Planning for the future now will help to pay for needs before wants. Get life insurance, health insurance, disability insurance and plan for retirement sooner so that the policies will get paid off sooner with less money and utilize compound interest. Compound interest is a way to let the money do the hard work and multiply in size.
Changing these few negative ideas about money will help alter any negative relationship one may have with it. There are five stages of a healthy relationship with money: earning it, managing it, spending it, saving it and investing it. People who utilize all five stages will be the happiest with their relationship with money and will ultimately change the relationship from helpless and complicated to stable and secure. Money only has the power that we assign to it. When we stop assigning it control over us, we can truly accomplish financial happiness.