Cash matters in our lives. No doubt about it. Why is money important? What makes money such a crucial tool? Let’s look into that.
These are two very different messages about money. On the one hand, some people say that money doesn’t buy happiness. Regardless of all the accumulated wealth and money you have, it does not really provide true happiness.
On the other hand, some people firmly believe that money is very important. And with money, you can buy your own form of happiness. By having money, your world may open up to a whole new state that can bring you the satisfaction that you long for.
Now, the people who say that money doesn’t buy happiness often associate money with the negative aspects of money. They see the downside of being wealthy. The problem of having a lot of money and how it can change you as a person and your life as a whole. These people also believe that there are far more important things in life than this piece of paper.
Then there is the message that money is everything. This is portrayed by celebrities, the media, and the glorification of wealth – always wanting more, bigger, better. That there is no such thing as enough when it comes to money. You need to find ways on how to add more dollars to your bank account.
These are two completely different messages, and my goal is to show both sides so you can come to your own conclusions.
Why Is Money Important?
In today’s world, it is very hard to deny that money is important. It doesn’t matter your assumptions about money, and money is an important part of surviving and thriving. Many people write songs about money, and others love to spend Bill Gates money on a random website.
Many will dismiss money as unimportant or negative, which can be a big mistake. When you embrace the message that money is important in today’s world, you will get ahead. You can realize your goals and dreams.
For example, my personal goal is to be financially independent. I want to be financially independent because I want freedom. While money is not an end goal, it is a means of getting to my goal.
Without having money, I would never get to my goal of reaching financial freedom.
Why Do We Need Money?
Money can give you financial security and safety for you and the people you love. Certain basic needs have to be met, such as food, shelter, healthcare, and more. You don’t need to have as much money as Warren Buffett, but you will need some.
As money is essential in life, an understanding of basic personal finance principles is needed. You need to know how to make money, save money, and have enough so you can provide for your daily needs and retirement later on in life. You will start to save for retirement, set up an emergency fund, and save the money you’re not spending. When you’re saving enough money, you may reach a point in life when you’re financially free and never have to work again.
Money Is A Crucial Tool
What you should remember from this article is this: money is neither good nor bad. Money is just a tool; it is something neutral that you can use towards your goals.
Money is a tool that can build up or a tool that can break down. It can allow you to go after your goals, pursue your dreams, grow personally, and make the world a better place.
Money can also be used in negative ways; for example, money can allow you to take advantage of people. That doesn’t make money bad, the tool is not taking action but the person holding the tool.
You can compare money with a knife. You can cook tasty meals with a knife, or you can hurt someone. The choice is yours.
How You Can Use Money Towards A Better Life
Money can be used towards a better life; that is why money is important. There are tons of other answers to the question of why is money important, including:
- Money is important because it will give you financial independence. From your partner, from your job, and from anything you simply don’t want to do.
- Money is important because it gives you choices. You have the freedom to stop working a job you don’t like, you have the freedom to go traveling wherever you want, and you have the freedom to make all the choices you want.
- Money is important because it will give you less stress. Back when I had little money, believe me, I was stressed out. Growing my wealth took a big part of that stress away.
- Money is important because you can give back. To your parents or charities, for example. While being kind to others doesn’t have to cost a dime, it’s a great feeling to contribute to the improvement of the world.
- Money is important because it gives you education. While it shouldn’t be this way, money does provide you with education. If you or your children want to go to college or university, money is an essential part of that.
While you may have different reasons why money is important, there always are great reasons to have more money.
It’s not that you need to hoard money and be greedy about it. Money is an important part of our lives, and we should make sure that we’re comfortable. Once you’re comfortable, you can give and give and give.
Break The Need For More
Money is important. It can provide us with our basic needs to live life, give us access to healthcare when needed, give us a good education, and give us choices.
However, we need to be careful not to glorify money. Yes, money is important. Yes, money management and saving money are great. Yes, we need money and financial resources to survive. It is not the most important thing on this planet, and money can’t buy everything.
Many people feel the need for more money. People who are greedy on Wall Street, the people, charging more than they should for certain services, and the people who want to get rich no matter the costs.
While it is good to think that money is important, that is no reason to chase money no matter what. No matter who you hurt, no matter what you have to do.
How much money is enough is a very important question. You don’t need all the money in the world, but you need enough to live comfortably.
A study found, very interesting, that after $95,000 annual income (in the US), the happiness did not increase. That means that above the $95,000, the extra hours you work or the extra side hustles you’re working will not increase your happiness.
Remember that when money comes to us, it often comes at a certain effort in terms of time that you can’t get back.
In the long term, buying more things won’t make you happy, you see. That’s why experiences are better than things.
A Bright Financial Future
Money is a tool that you will need in life. Make a financial plan as early as possible to make sure you have a secure financial future.
The first thing to build a financial future is to save enough money for an emergency fund. Generally, between three and six months of living expenses are enough. When emergencies happen in life, and they will, you don’t have to put them on your credit cards.
Also, write down your financial goals and know how you’re going to reach them. Knowing your goals will keep you motivated and improve your financial journey.
Do some retirement planning, independent of your current age. The earlier, the more compound returns will work in your favor. Start saving money in a tax-advantaged retirement account, which can be a pension fund or a 401(k). You aren’t paying any taxes on that money, which means higher returns!
Besides that, try to pay off debt like credit card debt and student loans. Save more each month, spend less, earn some extra money, stop living paycheck to paycheck, or paying yourself first, and you will surprise yourself with how quickly you can pay it all off.
Money management is an extremely important skill to learn; the earlier you know it, the better.
We shouldn’t forget to invest. Investing is one of the best ways to grow your net worth and manage your money. Why? Investing in the stock market will earn you money through compounding returns. Your returns will start to make returns, which means your savings toward your financial goals will skyrocket!
Bottom Line – Why Is Money Important?
Money is a sensitive subject, and everyone has their own opinion. The reason for the blog post is to let you think about the importance of money. One thing is sure, money is important now and will be important in the future. It’s easy to dismiss money as not important when you have enough to live comfortably.
In today’s world, money is still a means to an end. Don’t mistake money for the end goal because it is not. Money shouldn’t be chased at the cost of relationships, health, or joy. There are still plenty of things money can’t buy.
Money can allow you to find more happiness, but that’s certainly not always the case. Use the money to buy experiences, and you will get invaluable memories in return. Money is only good if you work for the right goals and have people close to you to share it.
Align your personal values with your money, and you will experience wealth. This is the most important aspect which this blog is all about. Attain wealth instead of just being rich. Attain wealth instead of disregarding the value and need of money. Only then can you truly achieve true happiness in your life.
What do you think? Why is money important?
Founder of Spark Nomad, Radical FIRE, Journalist
Expertise: Personal finance and travel content
Education: Bachelor of Economics at Radboud University, Master in Finance at Radboud University, Minor in Economics at Chapman University.
Over 200 articles, essays, and short stories published across the web.
Experience: Marjolein Dilven is a journalist and founder of Spark Nomad, a travel platform, and Radical FIRE, a personal finance platform. Marjolein has a finance and economics background with a master’s in Finance. She has quit her job to travel the world, documenting her travels on Spark Nomad to help people plan their travels. Marjolein Dilven has written for publications like MSN, Associated Press, CNBC, Town News syndicate, and more.