Why Is Money Important? 10 Key Reasons (2024)

Wealth, change, dollars, currency, fiat, funds… Money is called a lot of names, and each person has their own ideas about it.

For some, money represents freedom and happiness. Others have a not-so-fond relationship with money and resent that they have to spend their lives chasing it.

Regardless of your feelings towards money, though, money is important.

Money is an integral part of our society, and without it, you won’t get far in life. Even the most charitable non-profit organizations rely on money from donors so that they can achieve their goals and help others.

Still not convinced?

Below, I’ll share some ideas to help answer why is money important, explain how much is enough, and outline how to start changing the way that you think about money.

Understanding Money

Let me ask you a simple question – What is money?

No, this isn’t a trick question.

I want you to really think about what money is and what it means to you.

If you’re like many Canadians, money is represented by the bills in your wallet, the loonies in your pocket, and your bank account balance. Let’s take it back to an even more basic definition, though.

Money is just a commodity that’s been widely accepted as a medium for exchanging goods and services.

The Canadian dollar (CAD) is what Canada currently runs on. However, it could just as easily be gold coins or virtual cryptocurrency tokens.

10 Reasons Why Money Is Important

10 Reasons Why Money Is Important

In days past, Canada’s dollar was backed by a gold standard. This meant that an individual could walk into any bank and exchange a bill for a specified amount of real gold. The gold standard was abandoned in 1929, though.

Today, Canadian dollars are no more than printed pieces of paper that we accept as money.

This doesn’t make money any less important, though. At the end of the day, these “pieces of paper” are the difference between having a roof over our heads and living without a home. They’re the difference between a full stomach and an empty stomach.

Keep on reading to see why money is so important…

1. Money = Freedom

The more money you acquire, the more freedom you’ll have. Whether you want to move across the country, fly overseas, or just have the freedom to quit your 9-to-5 and start your own business, money is essential.

Having money in the bank gives you the freedom to live life on your terms, go where you want to go, and spend your time as you see fit.

Before I quit my corporate job, became an entrepreneur, and started travelling the world, I saved six months’ worth of income from my job. These savings paid for my plane tickets and allowed me to cover my bills for several months as I started my own business from the ground up.

2. Money Covers The Necessities

Unless you plan on living completely off-grid in the wilderness, building a shack out of sticks, and hunting your own food, you’ll need money to pay the bills.

Property is owned by people who want compensation, electricity requires massive amounts of work and machinery to produce, and vast networks of underground water pipelines bring fresh water to your faucet.

None of this comes for free, and you’ll have to pay if you want to enjoy life’s comforts.

3. Money Allows You To Provide For A Family

If you want to start a family one day, you’ll need to provide for your children. As a parent, it’s your responsibility to feed, clothe, and house your kids until they’re old enough to take care of themselves. If you can’t provide, then your kids could be taken away and put into the foster care system to be cared for by others.

4. Money Allows You To Retire Comfortably

Even if you plan on retiring humbly, you’ll still need some money. You’ll need enough money saved to cover your utilities, pay for housing, and put food on the table from the time you stop working until the day you pass on.

5. Money Can Grow If It’s Invested

If you invest your money wisely, it can be used to produce more income. Passive income businesses allow you to invest your money in exchange for earning steady profits that can take care of you for the rest of your life.

6. Money Can Lead To Innovation

Science, innovation, and technological growth all require time and money. For Apple to become the massive company that it is today, Steve Jobs needed to find investors who helped him source parts and labour to build his first prototype computer.

All of the technology we have today is all thanks to ideas which were financially backed by investors.

7. Money Buys Experiences

Want to climb to the top of Mount Everest? You’ll need thousands of dollars worth of gear to survive the climb. Want to drive a Lamborghini around a race track? You’ll need to buy or rent one for the day.

There’s plenty of fun to be had on the cheap, but some of life’s most exciting experiences require a paid ticket if nothing else.

8. Money Can Facilitate A Healthier Life

Unfortunately, the healthiest food also happens to be the most expensive. If you want to eat organic, limit the chemicals you consume, and eat a nutritious diet, you’ll need to buy food. Money can also pay for a gym membership, physical therapy after an injury, or to buy essential vitamin and mineral supplements.

9. Money Allows You To Pursue Passions

Let’s just say you want to start a band. You’ll need to buy a guitar, piano, drums, and all of the audio equipment you need to put on a show and record an album.

Perhaps you want to start the next great business that revolutionizes the way the world works. Either way, money allows you to pursue your passions and make the most of your time.

10. Money Can (& Should) Be Shared

Lastly, money can be shared. Take our Employment Insurance program, for example.

Every business and employee in Canada pays a little bit out of their income into the EI program, which provides vital relief for those who are between jobs, are hurt on the job, or mothers who need to take maternity leave from work to care for their children.

How Much Money Is Enough Money?

It all depends on your goals. If you want to start a small business, you’ll need enough savings to pay for startup materials and cover your bills for several months while it gets off the ground. If you want to retire comfortably at 65 and stay on top of your bills, you’ll want to have around $1 million saved.

To figure out how much is enough, outline your goals and how much they cost and create a timeline for yourself.

Changing Your Ideas About Money

Changing Your Ideas About Money

Is money stressing you out? Does the thought of money make you cringe? If so, you may need to change some of the ideas that you have about money. Here are some tips to help you develop a better relationship with money and remove stress from the equation.

Don’t Idolize Money

If you idolize money, it’s always going to have more power over you than it should. People who idolize money may be more willing to sacrifice their morals and ethics to acquire more of it, and money will always seem like this grand trophy to be acquired.

Once you reach your goal, you still won’t be satisfied, though, and you’ll relentlessly pursue money in search of greater happiness.

Always remember – money is a tool, and nothing more. I heard a great quote about relationships being the true currency of life, so try to use your money to improve the quality of your interactions with those you care about.

Save More Than You Spend

If money stresses you out, then you could have a spending problem. If you’re constantly spending more than you save, then you’ll often find yourself in debt, falling behind on bills, and unable to really enjoy life.

Open up a high-interest savings account (like Neo Money), start living more frugally, and create savings goals for yourself. Once you have money saved in the bank, you won’t have such a strained relationship with it.

Make Your Money Work For You

A wise man once told me to, “treat every dollar like an employee.”

If you invest your money into a profitable business, stocks, and assets, then your money saved can be used to generate even more income in the future.

Remember – money is the only “employee” that can work 24 hours a day.

Affirm Your Earning Capability

If you’re constantly engaging in negative self-talk, then you’ll never be able to earn as much as you could. Sometimes, the key to earning more is to believe that you can earn more.

Once you develop a more positive relationship with money, you’ll search for higher-paying jobs and find more opportunities to get compensated for your unique skills.

Conclusion – Understand That Financial Freedom Is A Journey

Why Is Money Important

The journey to financial freedom doesn’t happen overnight. It’s a journey that can take years or even a lifetime. The sooner that you change your ideas about money and start taking actionable steps towards saving, investing, and growing your money, though, the quicker you’ll achieve financial freedom and happiness.

Not sure where to start saving?

Check out these life hacks to help you start saving more!

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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