The Psychology of Money

What to Save and What to Spend?

Money is Neither Good Nor Evil

As we come into election year 2012, we will hear a lot of arguments about how the biggest and wealthiest entity in America, the federal government, should spend its money. Politics is a strange mixture of morality and finances.

The same is true of our personal lives. We wish to spend our money wisely and not make mistakes that will be costly. Squandering on vices is deemed evil while banking on wholesome ambitions is considered wise.

Money can make many differences; it can cause us to go through phases of wealth or poverty in our lifetimes; it can result in feeling peaceful at one time, but anxious at another.

Any of us who comes into money suddenly, by a windfall or a big break in life, is in danger of becoming a spendthrift. An unexpected influx of riches can leave anyone in a state of uncertainty as to what to do with new-found wealth. Most of us would leave the money in the bank while we tried to calm down enough to make the right decisions.

We are very careful with discretionary funds because if we make the wrong choice, there will be no greater anger in life than the rage we would have in our self-condemnation.

There is a great responsibility to having wealth. When that responsibility comes unexpectedly, such as through inheritance or luck, many people experience high anxiety. There's a temptation to spend wildly on things we always denied ourselves for lack of funds.

It's more peaceful to have just enough income to make ends meet. To be sure, wealth does not make everyone happy. It can be a stumbling block, tempting people into vices or making them paranoid about people who trick others out of their money.

Although we can become nervous wrecks after coming into a lot of money, one famous gambler of the mid 20th Century, Nick "The Greek" Dandolos (an associate of Minnesota Fats and Fast Eddie Folsom) was quoted as saying, "There is no greater thrill in life than suddenly winning a large sum of money."

He died penniless, but his words are worthy of consideration. Any of us might win the lotto if we tried, but the obvious good luck could have a corresponding negativity to it. The excitement of winning might cause us to become addicted to gambling.

Earning, spending, adding, and subtracting money is like doing a crossword puzzle, playing golf, or going birdwatching. It's an activity that we all do. But it's much more serious than a pastime because families can depend on us.

The average person nowadays is fairly content when the income at least corresponds to the expenses. Balancing a checkbook carefully and avoiding excessive spending would not be called greed. It's just a way to avoid becoming a nervous wreck over foolishly wasting money.

Many people who are in the upper ten percent do not feel superior to anyone else, but rather say that their wealth came to them by good fortune in circumstances over which they had no control. They were just in the right place at the right time.

What's more, the wealthy are not guaranteed happier lives than anyone else. They have the same tragedies and maladies that the rest of us suffer.

There's a line in the New Testament which often is used to associate money with something morally wrong. It's not that money itself is the "root of evil," but it's the love of it more than the caring for people that leads to greed.

We all would prefer to live honorable lives. This can be achieved through productive work and caring for loved ones. Placing money on a higher plane would suggest a disrespect for humanity itself.

Therefore, money is like the air we breathe. It's neither here nor there when it comes to morality. But the connection between it and our emotions is undeniable. This is the true importance of money.

"Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." (Will Smith) We can make fools of ourselves over money.

The importance of money can not be overemphasized. A person's attitude toward it can shape his or her entire life, lead to happiness of despair, and cause or prevent calamities.


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