Money, as defined by Webster’s dictionary, is an economic tool, a “medium of exchange.” Thus, we trade our physical labor for paper money and then exchange our paper money (or credit!) for the material goods we want. But money is much more than simply an economic tool. It is also psychological currency that buys emotional satisfaction. Money touches the essence of who we are and stirs our souls in ways that few things can.

In fact, there’s a sense in which money talks to part of our society—always by saying goodbye. First, it says goodbye to the typical family who struggles to work more hours yet still spends more money than they’ve earned; or to family members who vainly squandered hundreds, even thousands of dollars each year on gambling and lottery tickets.

Second, money says goodbye to the married: Conflicts over money are a leading cause of divorce. Money produces deep conflicts between husbands and wives as it exposes differences in personality, lifestyles, beliefs, and goals. These tensions pull on a marriage because money often reveals our most closely held values, and when those values are violated, many of us react forcefully.

Third, money says goodbye to the living: It is the leading cause of murder and a major contributor of depression and suicide. “Money stress blamed in 3 deaths” read the headline of an article whose graphic nature was exceeded only by its familiarity. “The outburst of gunfire in Reston [Va.] that left three people dead was the result of ‘financial stress’ in the family,” the news account began. “Police would not say what kind of difficulties led 40-year-old [Joe Smith] to shoot and kill his 36-year-old wife, and 7-year-old son, and wound his 11-year-old daughter, then take his own life.”

Does money buy happiness?

America is far and away the world’s greatest economic power. The average American’s annual income is ten times his middle-class counterpart overseas. Yet, despite rising financial prosperity most Americans feel little financial satisfaction. Does money buy happiness? Clearly it does not. Money has not and cannot meet our deepest psychological needs.

Grab our new online course on Financial Freedom for Couples!

Part of the dissatisfaction that many adults feel is due to poor to fair money management, despite explosive growth in stockbrokers, financial planners, estate planners, and insurance salespeople; not to mention self-help books, magazines and newsletters, more seminars and workshops. With all that information, we still have to account for:

  • A record bankruptcy rate during a time of unparalleled economic prosperity;
  • Americans spending outpacing their income resulting in a negative national savings rate;
  • Four of every five marriages experiencing financial conflict.

Clearly some form of restraint is necessary. But even with better money management, our biggest money problem will remain. That’s because almost all wealth-creating strategies leave out the most important point of all: We must use money in a way that satisfies not just the senses but the soul.

The truth is that money mystifies us. We just don’t know what we really believe about money. We can’t live with it, yet we can’t live without it. We want more of it even though spending more of it won’t make us any happier. The typical American spends 50 percent of his waking hours thinking about money, yet all that this financial daydreaming has produced is, in the main, a cultural nightmare.

Learning your money attitude

Although money is supposedly just an economic tool intended to be exchanged for other things, for such small pieces of paper and metal it sure carries a lot of weight. What does money mean to you? How do you feel about it? In spite of the strong relationship between what we think and how we act, most of us have not given serious thought to what we think about money.

How we see money is a statement of how we see ourselves. The first step to determining what to do with your money is to develop an awareness of how you feel emotionally about money and your relationship with it. A profitable exercise to begin understanding your money attitude is to establish a financial baseline, according to Olivia Mellan, author and consultant in the field of money-conflict resolution. Mellan suggests that you articulate your own personal feelings about money by coming up with two lists, one positive and the other negative. Complete the exercise below, which is adapted from Mellan’s work.


On a sheet of paper, prepare two lists. On the first list, show all areas of your personal finances that give you pride or pleasure. You should have at least two, but it could be many more. For example, your positive list might include responses such as:

  1. I have a budget and stick to it.
  2. I have clean credit.
  3. I’m a generous giver.
  4. I have over $100,000 in my retirement plan.

Next, describe two or more aspects or attitudes about your personal finances that you’re not comfortable with, maybe even embarrassed or guilty about. These might be things such as:

  1. I have too much debt.
  2. I am overextended financially.
  3. I have no savings or investments.
  4. I have trouble giving money or spending money on other people.

Which list is longer for you or the easier to come up with, the positive list or the negative one? How has each list affected your life, including significant relationships? Have the positive entries caused any stresses that you may have unconsciously omitted from your negative list? For example, is the fact that you don’t have a problem with spending too much money because you have a problem of spending too much time at work? Now is the time to bring these emotions out into the light.

Source: Adapted from Olivia Mellan, Money Harmony (New York: Walker and Company, 1994), 17.

As you consider both lists and determine your financial baseline, realize that each list has value. The negative list is your catalyst to change the things you don’t like about your money attitude. When you finally get sick and tired of being sick and tired, you’ll no longer be willing to tolerate your negative emotions and you’ll be motivated to change.

Changes in firmly entrenched habits don’t come easily. It’s sometimes easier to live down to our own low expectations than to move emotionally into new territory. That’s why the positive list is so important. While the negative list is your catalyst to change, the positive list provides your confidence to change.

A  journey

There is a strong relationship between what we think and how we act. The problem is that most of us have never given any attention to how we think and feel about money. The goal of this article has been to help guide you through a process of self-discovery in order to establish where you are psychologically with money.

Ancient sailors navigated the oceans by using the North Star to establish their bearings so they would know how to steer the ship to stay on course. Unlike most other financial self-help materials that futilely presume to navigate you to a pot of gold at the end of the rainbow, this self-discovery could set you on a path of true wealth—a holistic sense of overall well-being— that makes the journey golden rather than the destination. It is a path that is uniquely yours because you are a unique individual with attitudes, priorities, motives, and values of your own.

Adapted from What Will I Do With My Money © 2000 by Ray Linder. Used by permission of Northfield Publishing, Chicago, a division of Moody Publishers. Excerpt may not be reproduced without the prior written consent of Northfield Publishing.