Do you wonder why is money important or wish it didn’t run your life?
While money is fundamentally good, there are some downsides to it. But when you change your mindset and look at money as a means to an end, you’ll see that it can bring you more happiness (not things) and create the financial freedom you crave.
Why Is Money Important?
Money doesn’t just buy you things. It buys financial security and everything you and your family members need to live life. You can’t go through life without it, even though material things don’t make the world go round.
When you have more money, you can feel more secure, relaxed, and enjoy life. You’re also able to achieve your goals, which is another key to happiness.
Does this mean you’re only happy if you make lots of money?
Not necessarily, but it does mean that money is essential, and you should know how to make sure your family has enough of it.
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1. Linked to Happiness
We’ve all heard the saying ‘money can’t buy happiness,’ but that’s not necessarily true. Recent studies show that happiness levels increase with higher income. In fact, households with income exceeding $80,000 had just as steep of an incline in happiness levels as those with lower incomes, which is the opposite of what previous research showed.
While buying material things may not buy happiness, knowing that you have enough money to be financially independent can buy happiness, and that’s why money is important.
2. Offers Increased Freedom and Experiences
When you make enough money to meet more than your basic needs, you feel increased freedom. You can do what you want when you want without worrying about what you might have to sacrifice.
You can enjoy your hobbies, travel, spend time with family, and not worry as much about spending money. You need money to live your life’s joys or fulfill your purpose. Everyone has a reason they are here, and having plenty of money will allow you to find that purpose.
3. Creates More Options and Opportunities
When you have enough money, you have more options. You don’t have to be stuck at a job you don’t like. Maybe you even try a new career or start a new business. You can have fun with your family members, take adventures, and try new things.
You might even find that you go back to school or start a new hobby to increase your life satisfaction. When you have enough money, you have the emotional well-being to make tough decisions and do what you want in life.
4. Provides Consumers With Goods and Services
The definition of the importance of money comes down to what we wouldn’t have in our lives today. It takes money to make money, and in today’s world, nothing has been more accurate. Think of all of the latest technologies you have in your possession. Without money, the latest iPhone or the most updated computers wouldn’t be possible. We wouldn’t have Ring doorbells or security systems for our homes.
Financial resources are the key to making new goods and services that make the world a better place to live.
5. More of It Reduces Financial Stress
The more money you have, the less financial stress you typically have, which is another reason money is important. When you live paycheck to paycheck, it’s hard to find joy in each day. Instead, you worry about how much money you spend and how it will affect your ability to make ends meet.
Not having a good income can cause fighting within a relationship. If one spouse is a spender and the other is a saver, there could be a lot of arguments and stress that can lead to separation or divorce, or at least mental health issues such as anxiety or depression.
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6. Money Creates Financial Security
Without money, it’s not possible to have financial security. You need money to ensure your future. Whether you’re worried about retirement, your child’s college education, or just if and how you’ll live comfortably, money is important to reach these goals.
7. Can Strengthen One’s Home and Community
It’s easy to give back when you have as much money as you need. Money is often the heart of any community because it helps those in need. When you’re able to give back along with others, it can create a tighter-knit community that takes care of one another no matter the circumstances.
Why Do We Need Money?
The importance of money boils down to this – it provides the food and shelter we need to live along with all of our basic needs. Without money, you couldn’t pay your bills and might not have a roof over your head or food on your table. You wouldn’t have proper health care, clothing, education, and transportation. These are the vehicles to a successful future, and when we have these things, it causes much less stress.
You also need money to achieve your life goals. Saving money is important, obviously, but having enough money to invest so that it grows and creates a passive income is even more critical. But it takes money to make money.
Downsides of Money
As much as it’s important to save money, earn money and have a lot of money in your bank account, it has its downsides too.
Becomes an Obsession
If money becomes an obsession, it can ruin your life and even your relationships. Greed can cause people to make bad decisions for their own financial gain. While making good money is important, the relationships and values in your life are just as meaningful.
Money is often the root of stress. While it’s one of the most essential things in our lives, it can also be the one reason we disagree, can’t sleep, and have anxiety.
If you need more money, it can be stressful as you figure out how to earn extra money to pay your bills. Do you take on another job, start a side gig or invest more aggressively? If you have too much money, you can get greedy and do things you wouldn’t normally do.
There must be a happy medium where you balance your needs with your wants while also giving back to the community. When you reach this level of financial independence, you’ll live a better life and not have to worry about money.
Have you ever heard money is the root of all evil? It can cause a lot of stress and disagreements between partners, especially when you aren’t on the same page. Unfortunately, personal finance isn’t something we learn in school very often, so some people come to a relationship with little to no idea how to manage money.
All they know is they like to spend it. They might have a lot of credit card debt or always have money on the brain because they’re addicted to spending. Both parties need to be on the same page long before you get married, using your financial resources to get on the same page, so there are fewer disagreements in the marriage.
Why Is Money Important FAQ
How Much Money Do You Start With in Life?
Your money story starts when you are born. It’s created as your family deals with money and surrounds you with those feelings. You might grow up with a positive money mindset, knowing you always have enough, or you could grow up with a negative money mindset assuming that money is evil and you’ll never have what you need.
This money story is the start of how much money you start with. As you grow up, you’ll take these feelings with you, but the most important thing is to create your own money story. Then, work hard, get a good education and learn what you should do with your money to reach your goal net worth.
Is Money Everything?
Money isn’t everything, but it’s the basis of many things. Without it, you couldn’t meet your basic needs or reach your goals. So while money can make things complicated and be a source of stress, it is also the path to happiness- not just because it can buy you things, but because it can help you get to where you want to go.
How Much Money Is Enough?
Every person has a different definition of how much money is enough. For some, they just need enough to cover the basics. They don’t have any desire to be rich like Bill Gates, for example. While others want as much money as possible so they can do good in the world, do what they want for themselves, and feel as financially free as possible.
What Role Does Money Play in Your Life?
Money is important in everyone’s life, but to what degree? Think about the role money plays in your life. It doesn’t have to be the most important thing in your life, but it will likely be the driver to many of your life’s aspirations and goals.
How You Can Use Money Towards a Better Life?
Money can help you get a good education, create the career you want, and help you build the life you want for yourself and your family. Whether you buy a house, start a business, travel the world, or give back to the community, money is at the root of it all.
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If you wonder why is money important, you aren’t alone. For many people, money can cause a lot of stress and unhappiness. However, understanding why it’s important and how you can live the life you want because of it will help you change your money story and start living the life you want.
Samantha Hawrylack is a personal finance expert and full-time entrepreneur with a passion for writing and SEO. She holds a Bachelor’s in Finance and Master’s in Business Administration and previously worked for Vanguard, where she held Series 7 and 63 licenses. Her work has been featured in publications like Grow, MSN, CNBC, Ladders, Rocket Mortgage, Quicken Loans, Clever Girl Finance, Credit Donkey, Crediful, Investing Answers, Well Kept Wallet, AllCards, Mama and Money, and Concreit, among others. She writes in personal finance, real estate, credit, entrepreneurship, credit card, student loan, mortgage, personal loan, insurance, debt management, business, productivity, and career niches.