The Top Money Tip of All Time: Money is a Tool, Not a Solution

Posted on 13. Jul, 2006 by in Saving & Investing

goldenhammer.jpgMoneySense Magazine asked a cross-section of Canada’s leading experts on personal finance what they considered the greatest money tips of all time and came up with a list of the 25 top money tips of all time. I found some of the tips very important and applicable to everyone that reads this blog but I wanted to highlight one tip that I would consider the most important money tip of all time: “Money is a Tool, Not a Solution.”

As you may or may not have noticed, the personal finance blogging niche has grown incredibly over the past year or two. There now are even personal finance blogs dedicated to smaller PF niches including single mothers, dual-income with no kids, students, etc. But as I read more and more PF blogs I see that an increasing number of them seem to be going after the get-rich-quick approach. This trend has been just one sign to me that our society is focused more on money than ever before.

If this trend isn’t enough, just take a quick look at bankruptcy and credit card debt statistics. The fact is, Americans are spending more than they have, saving less than they ever have, and entrenching themselves in more debt than they can handle. I have noticed even in my own life how I seem to think that what my parents considered luxuries are now necessities to me. I always remember hearing stories of my parents’ college days when they lived in some hole-in-the-wall with horrible plumbing and ate nothing but Ramen. However, I find myself complaining when my two bedroom apartment isn’t big enough and my lamp crab meat ravioli didn’t turn out just right (I like to cook by the way). My parents had to wait years to save up for a down payment on a home – but many of my friends right out of college are buying homes much larger than they can afford – and are taking out zero-down loans to do it.

I just wanted to get up on my soapbox and hopefully instill within you the idea that money is not a solution to any personal, professional, or any other type problem. Take a look at the recent corporate frauds that lost investors millions – the men that perpetrated those frauds always thought that more money was the solution. If only they could make more money then they could hide the previous quarters’ losses and stop cooking the books. Those who believe that money is a solution for their personal problems will only find themselves with a new set – and throughout the process you might even lose other things you hold dear such as your family and friends.

Instead, begin to think of money as a tool. If you think of money like a hammer, for example, the idea of using a bigger hammer or using more hammers to get the job done begins to sound funny. But if you use the tool in a new, smarter way you will be able to get more out of the tool without spending too much more time and energy. My favorite example of this would be using a wrench to loosen a stubborn bolt – no matter how hard you try and turn that wrench it’s not going to budge. But throw a piece of pipe on the end of that wrench to take advantage of leverage – and that bolt will come loose in no time.

As much as I talk about money on this blog I just hope that you realize that personally, I believe that money isn’t the answer to everything. There is too much good that can be done with money that it’s sad to see people striving after it for the wrong reasons. So if you think you might be focusing on money a bit too much – looking at it as a solution and not a tool – I invite you to take a step back and re-prioritize your life so that you use money to accomplish the things that really matter.

Ok, I’m stepping down from the soapbox for now…

3 Responses to “The Top Money Tip of All Time: Money is a Tool, Not a Solution”

  1. Chad Lapa

    13. Jul, 2006

    Couldn’t agree more. I think Warren Buffet would agree with this too.

  2. Thomas Madrid

    13. Jul, 2006

    Excellent post! I also have friends that are buying big homes and make less than I do. They wonder what I’m doing with all of my money, and I always tell them, “Hoarding it.” The leverage I’ve created by saving lots of money, and waiting for the housing market to cool off (I live in Tucson, AZ) will let me buy what I really want, when I want it, and with greater peace of mind.
    Again, a great post, and another reason why I keep reading this blog.

  3. arkadaÅŸ bul

    07. Nov, 2006

    If only they could make more money then they could hide the previous quarters’ losses and stop cooking the books

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