How to Make Friends with Money

Money is a powerful tool. Smart people make friends with money; fools let it make slaves of them. Want to make friends with money? Here's how.

Difficulty: Moderate

Instructions

1. Stop pretending money is not important. Whether we admit it or not, money plays a powerful role in all our lives. It directly impacts our most intimate relationships and our own well-being. Decide to make friends with money.

2. Review your attitude toward money. Never feel embarrassed for having a healthy respect for money and what it can do for you and others. When you look at all the good that money does, admit that money is the root of much good.

3. Use money wisely. Recognize that it is a tool that helps us build something of value or make our lives easier. If you are not careful, it can enslave you, making you toil eight, ten, even fourteen hours a day to acquire it. If you learn how to tame it and master it, however, it will do whatever you tell it to do. You can decide how, when and where it will be used.

4. Analyze how you use money. Make a list of how you have spent it wisely and how you have not: paid off a credit card bill in full (good); taken out a new credit card to get that 10% discount at a department store (bad); told your children or spouse, “No, we can’t afford that right now” (good); decided you just couldn’t pass up that super-discounted three-day vacation, even though you knew money would be tight next month (bad). You get the picture?

5. Don’t spend money. Allocate it. Set family and personal goals. Then use money to achieve them. In other words, decide how you want to spend your money to accomplish the most good for you and your family.

6. Save at least 10% of every dollar you bring home. If you save a portion of the money you work for today, that money will in turn work for you in the future. Wise investments -- especially tax advantaged investments -- are simple, effective tools for building wealth.

7. Protect your money from fire, theft, death and disability. You can work a lifetime and then lose everything you’ve achieved if your house burns down or is burglarized, if you die prematurely or become disabled. Use insurance –- homeowners, auto, life, disability and health -- to protect your money and your family.

Tips & Warnings

• You can squander the money you earn on senseless pleasures that bring no true satisfaction (and very often very little pleasure) or you can employ it to achieve your goals and to help you realize your dreams. You can become the master of your money or you can become its servant. The choice is yours.
• There is nothing less satisfying than money for its own sake. Money will not buy happiness.

Resources

• The Back to Basics Book of Money! A Couple's Guide to Financial Peace

[iknewthat]

on 7/8/2009 Superb aricle. 5* Thanks for the info!

[arwen1964]

on 12/23/2007 This is an excellent article. I particularly liked this:

" Money determines our standard of living and the physical quality of our life. It is money that allows us to clothe our children and keep a roof over their heads, to support our house of worship, to help others by donating to charities, and to put food on our tables or go out for a white-tablecloth meal on Saturday night."

[Chaddy]

on 12/21/2007 How true this article is! You hit it right on the mark! How I wish it were not true, but in today's society, money rules and not having it makes you have less say in things, not to mention, very unhappy! Thank you for the tips!