Your Finances Are Not “Personal”

Identifying with money is always a mistake

Photo by Morgan Housel on Unsplash

Most people think of money like bread: It’s an essential commodity, it has to come from somewhere, and if you haven’t had your daily share, you gotta go out and win it — or make it yourself.

Unlike actual bread, however, you don’t need money to survive. You can’t eat money. You need water, food, a place to sleep and a place to pee. Money doesn’t solve any of those problems directly. It’s just paper. Metal. Nowadays, it’s even just 1s and 0s on a screen. If push came to shove, those wouldn’t do anything for you.

“Well, but I can trade money for all of these things,” you might say, and since we’ve had a somewhat reliable system in which we exchange money or some other symbol for goods, shelter, and services for thousands of years, I can’t blame you for having that expectation — but that still makes money a thing you trade, not a thing you need.

You can live without money. Have you ever imagined it? If so, it was probably a dark scenario. Homelessness, hunger, bad health — these are the conditions we associate with the absence of money, but if money is only a stand-in solution to these problems, surely, there must be people who solve them directly, no? People who cut out the middleman and chose the source over the surrogate.

In the middle of Germany, the beating heart of Western civilization, several people have chosen to live alone in the woods. Up to 50 years ago, they built their own huts, they collected free tools, and they learned to sustain themselves. They eat what they grow, they chop wood to fire their ovens, and they live peacefully outside the monetary cosmos that now inhabits near every corner of this planet.

Many travelers live without money. They work for food and shelter. They exchange ideas for plane tickets. If you think about it, being a travel influencer would not require money. You make a food and room deal with a hotel in Bali, you stay there and promote them for a month, you pick the next hotel, rinse and repeat. In fact, this is exactly what many social media stars do. Whether money changes hands or not is a variable, not the equation.

Since money is only a thing you trade, you should value only what you can trade it for, never money itself. In that sense, it is not how much money you have that determines what you can afford, it is how much you have to offer. Money is just an option on how you want to redeem the value you create. It has no value on its own. It’s merely a layer of flexibility.

In the same vein, what you can add to the world is never money but always something else: Creativity, productivity, connection. Maybe your art entertains us. Maybe it makes us think. Maybe you’re great at solving manufacturing inefficiencies or have a rolodex others would love to access.

Money is only a small, partial reflection of your value to others, and therefore, money should never be instrumental to how you value yourself.

I don’t like the term ‘personal finance.’ It tries to wrap money into our identity. It makes money look like bread. That’s a bad idea. Getting your finances on track and healing your broken arm aren’t the same thing, but given the status we have elevated money to in our society, most of us feel like they are.

There’s a difference between your identity and your relationships, and so while it’s true that you must own your relationship with money, it does not make money a part of who you are. It’s a connection in your life like any other, and your responsibility is to manage your affairs rather than absorb them.

If a distant relative feels like a negative force in your life, you may decide to no longer engage with them. If a friend always picks you up when you feel down, you’ll draw them closer.

Money feels like the cousin you can’t get rid of, the person you always come home to, but the reality is if you really wanted to cut ties with it, you could. You just don’t see that as an option because society has confounded money and self-worth to the point where many of us are raised thinking they’re indistinguishable.

We often say we become the average of the people we hang out with, and though it’s true that our relationships can impact us a great deal, it does not mean we must let them define us wholesale — which is also why we commonly say we should “be ourselves” and not over-identify with others.

The same applies to money. Your finances are not “personal.” You need not identify with money. It’s a mistake. It’ll only cloud your judgment. It’ll impair your ability to make rational, good financial decisions.

Take “retirement” for example. It is meant to be a liberating event, but for most of us, it becomes a lifelong prison we hope to be released from by the time we turn 65. In reality, the feeling of freedom we want from it is available to anyone who spends less than they earn — and that’s something we can do at any age.

There is money, and there is food. There is money, and there is work. There is money, and there is happiness. All of these things can be connected, but none of them must be, and they’re definitely not the same.

Don’t make your finances “personal.” Make your money a relationship you manage, and manage said relationship well. You are not your dollars. You’re worth more than paper and gold.

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