The Importance Of Figuring Out Your Money Philosophy

This week some blogging friends and I launched a new project, a weekly online show about money called the Money Mastermind Show. The show will be a live show streaming on Google+ every week on Wednesday at 9pm central/10pm eastern. It will also be available on YouTube for later viewing, if you can’t make it at that time.

Our first episode this week was just an introduction to all the panelists, as well as a broad ranging conversation about money, and how we all need to have a philosophy about money that guides our decision making.

Today I thought I’d share that first episode of the show here, and then talk about my ideas about why having a money philosophy is important, and what steps you can take in order to come up with your own philosophy.

Why Is Having A Philosophy About Money Important?

I think it’s important to nail down your money philosophy as soon as you can, because how you view your money matters, and affects your end results.

If your philosophy is that money is something to pursue that will make you happy, or can be used to buy things that will make you happy, you’ll find yourself on an endless hamster wheel going nowhere fast.  You’ll probably end up with a bunch of debt as well.

Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants. – Ben Franklin

If you have a healthy philosophy about money, one that treats money as a tool, and not as an end goal, you’re more likely to come out on the other side with money in your bank account, and a healthier approach to earning, giving and spending your money.

Time is your friend when it comes to growing your savings for retirement, so the sooner you can figure out how you feel about money, and what approach you’ll be taking to your money, the better.

many people wait too long until they’re in the 30s or 40s to start saving, never really taking a pro-active approach to their money.  Far too often it takes a bankruptcy or thousands in credit card debt to change how they see money. By that time they’ve lost thousands of dollars in possible long term gains.  Don’t let that happen to you.

My Personal Philosophy About Money

My money philosophy has evolved a bit over the years. I come from a pretty frugal background, where my family didn’t always have a lot of money. It was made pretty clear early in my life by my parents that you need to realize that money isn’t going to make you happy, but that it can be a tool used for good, or for bad.  Put your faith in God and look to Him for meaning, and use money as a tool to do good for others, and for your family.  It’s ok to enjoy what you’ve earned.

My site’s tagline is “Give more. Save more. Live more”. It speaks to why I believe we should pay attention to our finances. If we pay attention to our money, we’ll be able to use our money for good purposes – for giving more to others. We’ll be able to save more for our retirement and for our children’s education. We’ll be able to use the money we’ve saved in order to live our lives to the fullest – while not dragging ourselves and our families down with debt and worries.

So here is my money philosophy broken down:

• Money is a tool, that can be used for good, or for bad, purposes.
• Don’t look for money to make you happy, it can’t.  Look elsewhere – in my opinion, faith in a higher power.
• Live below your means or you’ll never get ahead.
• Do your best to live without debt.
• Give generously.
• Save as much as you can.
• Live your life, splurge every once in a while – but stay within your budget.
• Give some more.
• Failure is OK, make it a learning tool. Refresh and re-tool when a mistake is made. As Zig Ziglar once said, “Failure is a detour, not a dead-end street.”.

These bullet points are really only the beginnings of my philosophy, which to some degree is always evolving.  So have you come up with your own philosophy about money?

Tips To Figure Out Your Money Philosophy

Coming up with your own philosophy doesn’t have to be rocket science. It really just comes down to asking yourself what you value in life, where your priorities are, what goals you have and how you can bring them to fruition.

Here are a few things you can do

• Figure out what is important to you: What is most important to you? Giving? Travel? Having kids?
• Set goals: Set immediate, short term, long term goals that you would like to achieve.
• Figure out how you can achieve those goals. What steps will you need to take? What sacrifices will you need to make? Will you need to change your thoughts or behavior to come in line with those goals?
• Shape your money philosophy around your values: Look to your values when coming up with your philosophy, and then find a way that you can achieve your immediate/short term and long term goals.

I’d love to hear what you have to say about your own money philosophy? What are your beliefs about money, and how do they guide you?