Money accompanies you throughout your life. It is almost everywhere, in every area of your life: recreation, health, work, accommodation, children. You need it to satisfy your needs.
But what is money? It is a common universal equivalent that can be exchanged for any goods and services. It would seem that you know all about money. But let’s define their place in your life and try to ask yourself some unexpected questions.
1. What Is The Value Of Money?
Everyone knows about the concept of the value of money in the global economy, which is related to its purchasing capability. This means that the value of money is displayed in the number of goods and services purchased with it.
However, what is the value of money to you personally? Is it something that helps you be superior, more successful, more glamorous, more prosperous? Or is it just a tool to an existence used to fulfill basic needs?
It can also be used to help those who need it but don’t have the ability or capacity to earn cash.
There are many stories of wealthy people giving away all their possessions as a donation. They believe that money has no value to them personally, but only love, free time, sunshine, and air.
The individual gives money its value.
2. Does Money Make Me Happy?
Even though happiness is an individual concept for everyone, for many, it is directly related to money and its amount. Agree that well-to-do people feel happier than poor people. It has nothing to do with income but with a sense of control over one’s own life. That feeling is just a result of your wealth. With more prosperity comes more choices about how, where, and with whom to live next. The above-described means that money is just a tool to achieve happiness. However, now, the role of money in attaining pleasure and joy is much higher than before.
3. What Determines My Financial Decisions?
If a person had always acted rationally, history would not have known global economic crises. However, we often decide before we even realize it and are guided by emotions rather than facts. Fear of loss or a desire for quick profits drives us to make quick and ill-considered decisions.
Our motives for action (unless you are a financial advisor) are based on our desires, not on the market situation. The desire to buy a new house, a car, open a savings account or take out a loan always have the goal of satisfying one ultimate need. Once that goal is achieved, the role of some Money Is Exhausted.
4. Why Do My Expenses Grow When My Income Goes Up?
Have you noticed this tendency? Suppose you look at your employee paystub and are happy to find that your income is increasing each month. It could be due to a promotion, a pay raise, or a tax cut. But for some reason, when you enter your paystub data into your budget, you see that you don’t have more money.
But you catch a proportional increase in your expenditures. You can afford to go to restaurants repeatedly, buy brand-name things, purchase a new phone and think about updating the house’s interior.
This phenomenon is called “lifestyle inflation”. If you haven’t heard it before, we will tell you that it just means an increase in expenses in proportion to the rise in your income level.
Lifestyle inflation should be treated with caution because once you cannot supply all of your new needs, you will feel a sharp drop down to the point of bankruptcy. Not being able to satisfy the usual desires can cause further and permanent loans. And that is definitely not the way up.
5. How Much Money Do I Need?
You’ve probably never thought about it, but how much money would be enough for you to live a life without poverty? Is it thousands or millions of dollars? And is it possible to calculate that amount somehow?
Of course, this question gets a lot of different answers from different people, as the depth of financial inequality has grown in recent years.
The necessary amount depends on the usual standard of living, constant needs, place of residence, and many other factors.
However, if you have the amount of money you need to live in your head, it is already a financial goal that can be achieved. You only need to determine what financial tools you use.
6. What Happens If I Lose My Job?
I’m sure you’re used to working every day, getting a decent salary, checking your paystub every month, and calculating your future savings. Your natural fear is to lose that stability.
You are responsible for your life on your own. It’s up to you to decide where and who and at what salary you work. You shouldn’t agree for less. If you are not appreciated in the workplace and select to get fired, you shouldn’t hold on to such a job.
Nevertheless, you can always have a backup plan and savings that will allow you to live well while looking for another job.
Try to move forward and upward. It is the only guarantee of future success. Develop yourself, learn new professions and foreign languages, improve yourself, and you will no longer be afraid of losing your job.
7. Am I Rich Or Poor?
Assessing individual wealth is very personal. But does this question really apply to money?
Wealth and poverty, instead, are not really material concepts. Some people, considering themselves rich, take money very lightly and are close to bankruptcy because of it.
Others, considering themselves poor, carefully plan their budgets, save, and have no way of satisfying their growing needs and enjoying their cash.
These extremes are far from the concept of financial well-being. You have to look for a middle ground in everything.
8. Who Will Own My Money When I Die?
It is one of the stages of financial planning that people rarely think about. Even now, you can determine how your money can be used. You can help your relatives or give it all to charity. Give it to the government or donate it to a church. In this way, finances can be used most effectively according to your will.
