Buzz
For many of us, our relationship with money is unhealthy. We often view it as an enemy—something that constantly blocks our path—or as a goal, believing it will fix all our issues. The truth is, money is simply a tool. Understanding this shifted my habits in surprising ways.
It's easy to say “money is just a tool” when you have plenty of it. But when you don't, it's hard to view money this way because many of our struggles are tied to it. We face real challenges: unaffordable rent, feeling stuck in a job we hate, or not being able to escape our neighborhood. It becomes difficult to see money as a tool when it feels like an enemy. Or, like I did, you might see it as a goal, a solution, and let it control your life.
Money isn't the enemy, nor is it the end goal. It's simply a resource you use to support your priorities. Sometimes, your priority is simply to stay afloat and cover your rent. In such cases, money is essential, but it still serves as a tool.
The reality is, these challenges don't disappear just because you label money as a tool. You still face the same issues, like paying rent, but adopting this mindset is essential for one major reason: it gives you a sense of control. It diminishes fear and allows you to take charge of your situation. Even though the change may be gradual, it's this shift that can transform your circumstances. Here are a few examples of how that works.
It Becomes Easier to Develop a Plan
When you're fearful of money, it's hard to create financial plans. You avoid budgeting because checking your bank balance causes stress. You skip the math because the numbers never quite work out, and even when they do, sticking to the plan feels impossible. You convince yourself it's all too difficult. But when you view money as a tool, you start focusing on solutions rather than emotions, because you can clearly see how to use that tool. This post from author Carl Richards helped shift my perspective, and in it, he explains:
This change in thinking may be subtle, but it dramatically shifts our approach to saving and spending.
We no longer see things as simply good or bad, positive or negative. Instead, we're focused on the results of our actions.
Richards captures it perfectly—it’s all about changing your mindset. And that mindset shift, focused on action, is everything when it comes to personal finance.
It begins with a clear, meaningful goal. Money itself isn’t the goal—it's about understanding how you intend to use it. Is it to support your family? Pay off debt or medical bills? Go on a trip? Once you identify your ultimate goal, you can plan how to use your money to achieve it. Here’s an example of what your strategy might look like:
Sell some items to build an emergency fund
Use the Debt Snowball method to become debt-free in two years
Look for a new job because you're debt-free now and have the freedom to leave your current job
When you view money as a tool or resource, it implies it's meant to be used, which gives you permission to do just that. Sure, it's challenging, and using money isn’t always simple, but thinking of it as a tool, rather than a barrier, makes it easier to create a plan—even when it feels like a roadblock.
You Overcome the Guilt of Spending
We all understand that sometimes investing in quality is worth it. For instance, a University of Michigan study examined toilet paper purchases from over 100,000 U.S. households for seven years. It found that high-income households bought toilet paper on sale 39% of the time, compared to just 28% for low-income households. Additionally, high-income households bought more rolls on average than their low-income counterparts.
On average, low-income households ended up paying about 6% more per sheet. Here’s what the study concluded:
Inability to buy in bulk limits the ability to time purchases for sales, and the inability to time purchases for sales limits the ability to buy in bulk. The study found that low-income households suffer financial losses by not fully utilizing these strategies, and these losses can be as much as half the savings they would have gotten from purchasing cheaper brands.
To be fair, when you're living paycheck to paycheck, buying quality isn't always an option. But even when you can afford it, some of us still struggle with the idea of spending the extra money. I dealt with this for a long time. I’ve always feared spending because I worry about running out. I feel guilty about spending more than I think I should, even on something as simple as toilet paper. Once again, Richards captures this perfectly:
Tools are meant to be used, not left gathering dust on a shelf. Instead of viewing money as something to save or spend, I began to see it as something to use... Money is meant to be in circulation, flowing from us to others and back to us. Even when we save, we’re just holding onto it for future use. Using money today isn’t about wasting it—it’s about using the best tool available to accomplish our goals...
I came to realize I had been idealizing money, which made me feel guilty about spending it. I learned that I could be frugal and still spend generously because frugality isn't just about saving—it's about using money, as a tool, efficiently. Sometimes, spending a little more for quality is simply the most effective use of that tool.
Since I started seeing money as a tool, I’ve found that resisting impulsive purchases has become much easier.
We've discussed prioritizing your expenses before, but it can still be difficult to resist, even when you know upgrading your phone isn’t a priority. I understand there’s a wrong way to use this tool, and I realize it can disrupt how I use it in other areas: money is a limited resource. This practical awareness helps me resist the urge much more effectively.
Saving Money and Earning More Money Aren’t Mutually Exclusive
To increase your bank balance, you can either save more of what you already earn, or you can find ways to earn more. For a long time, I believed the two were mutually exclusive—should I save more, or should I earn more?
When money is the ultimate goal, it’s easy to think in these terms. But when my perspective shifted, I realized that saving and earning more were simply tools I could use to achieve my bigger, more meaningful objectives: supporting my family, traveling more, and having more time to focus on my creative pursuits. I could both save more and earn more to help me reach my goals.
I also started to recognize when saving more and earning more actually worked against my goals. Sometimes these methods ended up being counterproductive. For instance, some of my money-saving habits were a total waste of time. My ultimate goal was to have more free time for my personal projects, but some habits took away from that. At times, I’d take on work I didn’t enjoy just to make extra cash, which ended up being counterproductive because it reduced the time I could dedicate to my projects.
In summary, viewing money as a tool helped me focus on my priorities and eliminate the inefficient ways I was using that tool to achieve my goals.
How to Start Thinking of Money as a Tool
Personal finance is about everything and nothing to do with money. It's about figuring out how to use money in the most effective way possible to live the life you desire.
Of course, saying “think of money as a tool” is much easier than actually doing it. Even now, despite being fully inspired by Richards’ post, I still find myself idealizing money at times. But a few things have helped keep my thinking in check.
Clarify Your Priorities: Since money itself isn’t the end goal, it’s important to define what the actual goal is. This is why many financial planners begin with one fundamental question: Why? By identifying your goal, you give your budget a clear direction. This way, every financial decision you make aligns with that goal, ensuring your choices serve your best interests.
Set Spending Priorities: Creating a list of things that bring you the most joy can help you focus your spending. After covering essentials, this will guide you toward using your money wisely. This involves prioritizing what truly matters to you. For instance, I enjoy eating out, but I love visiting family back home. Since money is just a tool, I need to use it efficiently, which means spending less on dining out and saving for trips to see my family. When you define your priorities, it’s much easier to use your money wisely.
Start Small: It’s easy to say “money is a tool,” but it feels harder to apply when you’re struggling financially. Big goals can seem impossible when your income doesn’t seem to match. The key is to focus on small, manageable actions.
Breaking down big goals into smaller, manageable steps can make them seem less intimidating. For example, instead of tackling a $40,000 student loan, break it down into years, months, or even weeks. $50 a week is far more attainable than the massive number $40,000. This shift in perspective doesn’t just change how you think—it helps focus your actions. When you focus on action, you’re more likely to take those actions and feel empowered. It makes seeing money as a practical tool easier rather than a daunting mountain to climb.
For most of us, money represents something much bigger than it really is. It’s a symbol of what we lack, reminding us of what we can’t afford. At its core, though, money is simply a tool. It can be powerful, especially when we’re short on it. A simple mindset shift won’t fix your finances overnight, but it’s a vital first step toward taking control of them.
Illustration by Sam Woolley.
