What is the first thing everyone should know about money

Someone e-mailed me yesterday, after she said she read my blog post about tariffs and inflation and said basically that all the information I had posted on my website so far, is useless to her. She is a single mom. She doesn't have the power to change how prices are calculated at stores. She just has to pay them. She works 2 jobs - one full time and one part time - she rents a 1-bedroom apartment with her 5-year-old son. Her paychecks go to paying bills, there is very little if any left over every month and although she does have time on her side to save for retirement, she is only in her early 20s, she has no idea how she is going to make it on the long run because most days she can't even see the end of the workweek let alone the end of the year or 10 years. She doesn't think in terms of tactical or strategic moves with her finances - she is thinking in terms of which bills she has to pay next and how she will make all her payments. She purchased my budget about 4 months ago and so far, it has helped her to plan for things easier - she can now predict her finances a little better - but the budget is just an accounting tool, it hasn't helped her decrease her bills and hasn't really done anything but to give her a better financial picture of just how far she is from her peers who seem to be traveling, enjoying life, being able to buy things like houses and cars, things which at this point, she cannot phantom she will ever be able to afford. Although I personally think that she is way too hard on herself and she has managed to at least stand on her own, and is taking steps to better her finances, which will result in a much better financial picture for her down the road, she is right about one thing.

Most things I post are somewhat academic and are used to really just explain things the way I see them based on research I have done and continue to do. But really, does a single mom care about why the Bank of Japan had a quantitative easing policy for the better part of 40 years following WWII that led to outrageous property prices, such as the value of the Imperial Gardens being higher than the entire combined GDP of Canada? I mean, it is nice trivia but for the situation the e-mailer is in, it makes no difference. In my response to her I asked, so what would you want me to tell you about, what do you think would help you if you knew about that I haven't talked about? She said, start talking about realistic terms of what money is, and what people should know about to understand the system better so they can relate their situations to the world better.

OK... Well. No pressure but it got me thinking. If I only had one opportunity to talk to a person and try to tell them in a singular expression what I thought the most important thing I had learned about the world of money over the past 2 decades is... I would say is this.

Stop looking at money like an item that you are chasing, and you are always trying to get more of. Stop looking at money as an object of obsession or an object of admiration, fear or any other emotional item. Money is simply a tool - but to start to understand how this tool works, you have to see it wholistically as it encompasses the entire world. Don't look at money as dollar bills. See it as a worldwide tool, regardless of if it is dollars, Yen, Euros, Swiss Francs, drachmas, rubles, renminbi, hockey sticks or eagle feathers. It doesn't matter what kind of currency you are looking at - try to see the world as ONE currency where all of humanity is using the same tool to try to gain resources and accumulate things.

If you want to understand how money works - you have to understand how people work because money or currency, is just an extension of the emotional state of human beings. Currency is nothing but a desire of people as a whole, to accumulate things and as the famous old saying goes, it is not money you want, really, because if you had a million dollars on a floating iceberg you would just have a bunch of useless pieces of paper that you couldn't do anything with. You don't want money. You want security. You want resources. You want groceries. You want heat in the winter and AC in the summer. You want comfort. You want a nice life. What good is money for someone who is dying of cancer and will be dead in 2 weeks? Do they care if they have 5 bucks or 5 million? They probably don't.

So, the bottom line is, if I had to talk to someone from another planet and try to explain to them what currency is, I would say currency, or money, is the tool people use to try to accumulate those things which they emotionally want in life in order to make their lives comfortable. So, if you want to start understanding money, start understanding currency, what I would say is the very first thing you have to understand is not any of those things - you have to understand yourself first. You have to have a clear and concise idea of who you are, what you emotionally want out of life and then start working towards accumulating those emotionally fulfilling things whether they are physical things, financial goals or emotional fulfillments.

So, if someone wants to know the most important thing that they need to know right now about money - I'd say they need to know themselves. Because the bottom line is we are all about the same as people. If you see the world wholistically, that you are an intricate part of, then you will understand that money works the same way. If you understand the world and you understand yourself, you will know that as you are a part of the world, currency is also a part of it and when you start seeing the world like that, the world of finance, you will start to understand that money doesn't exist as an independent entity that just ... exists. Someone has to make it - physically. A bank or a government has to bring it into existence. It is not just out there in the ether, just hanging out there. It is an intricate part of a wholistic world that we are all a part of it. It is not mysterious or out there. It is just another item like a washing machine or a car or a loaf of bread. Money is not a psychological barrier to getting what you want out of life - it is just a thing.

To get what you want out of life, you are going to have to work on something a lot more daunting than understanding money. You will have to start understanding yourself.

KUDOS to you, the person who e-mailed me. You are already on track to do so - even if you don't think of yourself as being on track. You already took the step of getting a budget and you are sticking to your budget. You are disciplined and you are striving to get closer to yourself. That journey that you are working hard to take steps on now, is what you will look back on in 30 years and see as the start of the amazing life you are on the verge of building for yourself.