You go to your job. You earn a paycheck. You spend that money. Pretty simple, right?
We all know it’s not that easy. You can read personal finance how-to articles until you’re blue in the face, but being well-equipped with knowledge of what you should do isn’t enough to make smart decisions. After all, we know reaching for the celery sticks instead of the cupcake is the best choice, but how many of us actually do it?
While we’d like to think our brains can override our impulses, our spending is often driven by emotions and messages we received about money at a young age. The way we deal with money often represents how we feel about control, power, fear, status, and self-worth.
The truth is that we aren’t even conscious of it
Late last year, author and self-help blogger/mind hacker Mark Manson put forth some interesting ideas on the real value of money and why we spend the way we do, and he explained how to end these destructive spending cycles.
It’s a little heady, so hang in there with me: Manson posits that while we often think that how much we make is a value statement about our identity or status, money itself has no inherent value. Instead, it’s simply a store of value, like time or knowledge. “Money is often just the vehicle of interchanging these various forms of value with one another,” he says.
Manson contends that materialism is a psychological trap — that we let things own us instead of the other way around, and we think things will get better if we just make more bank. But “no matter how much you own, how much you buy, how much you earn, the disease of more never goes away,” he says. “Meanwhile, you’re working longer hours, taking bigger risks, foregoing more and more parts of your life.”
Here’s the rub: we believe money holds so much value, but Manson believes that money is really just a neutral “vessel for the exchange of experience between two people. You make your money by creating experiences for others. You then give your money to others to receive experiences in return.” Even material goods, like jewelry, clothes, or cars, represent an experience of the associated social status, power, or speed, he explains. Essentially, Manson has found that money is not actually about buying things, but the experience those things give you. Still with me?
Money is an exchange of experiences
But “because money is an exchange of experiences, money often results in experience cycles: we give up one (negative) experience to earn money that then purchases the opposite (positive) experience,” Manson says. “Once the money runs out, we’re forced back to the negative experience and the cycle starts again.”
If you fall into one of these “experience cycles,” you become a slave to money, and earning more of it becomes your sole purpose and motivation, Manson says. We all know that doesn’t usually end well. Plus, true wealth won’t occur until the way you earn and spend money is aligned; “when our money is earned through a positive experience and spent on other positive experiences,” he finds.
Here are the three common cycles, according to Manson:
Stress cycles: These folks have high-pressure or high-stress jobs and then spend most of their money on things that bring them stress relief. “These people end up in a constant cycle of stress-generation and stress-relief while failing to actually build much wealth,” Manson says.
Ego cycles: These are the people who feel powerless, insignificant, or useless in their work environments, and to compensate for feelings of insecurity, spend money on superficial status symbols.
Pain cycles: People in this cycle hurt themselves in their line of work. “It may be physically (professional wrestling, sword swallower) or it may be emotionally/psychologically (sex work, demeaning jobs, abusive bosses or coworkers),” Manson says. They then spend their money on pain relief in the form of alcohol, drugs, and other distractions and diversions.
Manson concludes that in order to break out of these cycles, you must stop using money and material purchases as your metric for success. “The real value of money emerges when we leverage it as a tool towards our success rather than making it success itself,” he says. You’ll be better off “when it’s not about the accumulation of stuff but rather the enactment of experiences,” he says. (My two cents: it would also be wise to reevaluate whether you should really stay in a job or career field that causes you so much stress, ego damage, or pain that you feel the need to overspend to compensate.)
We are happier when we channel our money towards the values and experiences that are important to us, whether this means supporting our family or community, fueling our creativity, innovating in our businesses, or increasing our personal health or satisfaction, Manson says.
So if any of these cycles or spending patterns sound familiar to you, it may be time to face some demons and reassess your relationship with money. If Manson’s paradigm is true for you, breaking out of these cycles could significantly boost both your wealth and happiness.
- Keep reading: “How to Make Money Without Thinking About It”
- Part 1: Investing money without thinking about it
- Part 2: Saving money without thinking about it.
- Part 3: Four these remarkably useful budgeting apps
- Part 4: Points or cash-back credit cards? The 2018 guide
- Part 5: Declutter Your Life Fast AF with These 3 Apps