Introduction

“Money makes the world go round”.

“Money doesn’t grow on trees”.

“A penny saved is a penny earned”.

“A light purse is a heavy curse”. 

“Money is the root of all evil”.

These are some of the most common sayings about money, and you’ve probably heard at least several (if not all) of them. And while you may not agree with them, they’ve been generally accepted by society as some of the most truthful quotes about money. 

That said, how we perceive money affects our approach to it: is it a struggle to earn it, to spend it, to borrow it?

Because we want to help you develop a better relationship with money, we prepared this guide to explain money and its implications in a broader sense. Regardless of whether you’re currently struggling with money or you’re well-off, you’ll find this article helpful. In fact, every one of us can benefit from some extra knowledge about money. 

Let’s get started.

What Is Money? 

How do we define money? We all know what it is, what it’s used for, and how important it is in our daily lives. But sometimes, the things we understand best are the ones we find most difficult to define. And with money being so practical, it could be a nice challenge to draw a parallel between our experience with it and the existing definitions about it. 

According to Investopedia,

Money is an economic unit that functions as a generally recognized medium of exchange for transactional purposes in an economy. Money provides the service of reducing transaction cost, namely the double coincidence of wants. Money originates in the form of a commodity, having a physical property to be adopted by market participants as a medium of exchange. Money can be: market-determined, officially issued legal tender or fiat money, money substitutes and fiduciary media, and electronic cryptocurrencies. 

Overall, money is a useful and highly significant unit of exchange that may come in several forms (as the definition tells us) and is invaluable in socio-economic terms on a global scale.

Inspiring Money-Making Stories 

There are a lot of encouraging (and sometimes even unreal) stories about people who’ve succeeded in making money: some in serious debt, others while dealing with problems like homelessness, addiction, depression, and so on. What’s so inspiring in these “success stories” is the contrast between the low social and economic place where these people find themselves at the beginning of the story and the financial wellbeing they eventually achieve. Basically, they manage to succeed and literally “rise up from the ashes”. 

Then, there are stories about celebrities and their net worth - stories we’re interested in the most, as we’re always nosy about the lives of celebrities. The same applies to popular successful entrepreneurs - we want to know how they run their companies and how they earn large sums of money 

That said, we still like reading stories about “ordinary” people and how they started making money online. After all, these are the people we can relate to more than celebrities. Here are a couple of examples of rags-to-riches stories.

Example 1

I earned my first “online income” when I scored a job 20 years ago working with best selling author, entrepreneur, and agent of change Seth Godin at Yoyodyne, which was acquired in Q4 1998 by Yahoo! In 1997 I was looking for something exciting and new and was determined to move back to NY from South Florida and get back into the action. I decided this new thing called the “Internet” was the way to go. I read an article about Seth Godin and since he mentioned that although there were no current openings, he was always on the lookout for talent, I was determined to work with him at his start-up Yoyodyne. I sent resumes to probably 100 companies and when Yoyodyne called I knew it was meant to be (there is a bit more to the story).

I’ve had a front-row seat to the evolution of online marketing from what was traditional media and commerce first experiencing the move to digital, which was nothing more than simple communication and catalog tools, to full-fledged digital commerce and communication… and now scaled Social Communication which so wonderfully incorporates this Relationship component that is for me, the ultimate value. #FollowThePath #RonR… #NoLetUp!

- Ted Rubin (you can find out more about him on TedRubin.com) 

Example 2 

I make money online by blogging at ChristinaAllDay.com.

Lots of people get into blogging just to make money. I didn’t start that way. For me, my lifestyle blog was something fun to do in my free time. Then, I learned more about social media, SEO, and strategy.

That strategy part is a biggie. It means you’re not just blogging to blog, like I did at the beginning. When I started learning about SEO and how to find what people were searching word for word, how many people were searching certain keywords, and what the results were for those keywords, I started seeing more traffic. Yes, this means sometimes I wrote about things I wasn’t crazy about, but it brought in the numbers that brands like to see.

I think the secret is not to focus on working less to make more. Too many people are trying to do that in online business. It’s lazy and ignorant. If it were easy to make “real money” online, then everyone would do it. It takes work. Instead, focus on giving people what they want online.

Also, we all see a lot of bloggers and online marketers promoting how they can make money online, but I question how many of them actually are making money online through blogging or another online outlet… or if it’s just selling a course about making money online. If you want to make money online, I suggest you really vet who you learn from. Online, it’s easy to embellish facts (or just make them up), so be sure to thoroughly look at what you’re learning and who you are learning it from before investing in education if that’s the route you want to take.

- Christina Nicholson (you can find out more about Christina on ChristinaAllDay.com and Mediamavenandmore.com) 

Example 3 

I started my blogging journey in October 2016. I was not realizing the power of affiliate marketing. Now, I love to write on topics related to Internet Marketing, Affiliate Marketing, web hosting, etc.

In my initial months of blogging, I have written a review post on a web hosting program and other WordPress products and inserted my affiliate link to the review post. Within a few days, I had made a handful of $300+ commission. I was really amazed and this way I realized the power of affiliate marketing and now it is one of the primary ways to make money online.

Affiliate Marketing helps me to monetize my blog by providing relevant products and services to my blog readers. I love to mention the pros and cons of products that I like to promote as it makes the review post more genuine and user friendly.

To become successful in affiliate marketing you have to test the products or services first. It will help you to understand every aspect of the products and services which you want to promote. This will help you to create a killer review post that generates more sales and commission.

- Vishwajeet Kumar (you can find out more about Vishwajeet on Imbloggingtips.com) 

Example 4 

The first time I realized I could actually make good money online was landing my first freelance writing job with a company that provided me steady work for over two years. The need for online content is great in a host of niches, and over time, I was able to get a steady flow of work from a variety of clients, primarily long-term. I was making significantly more working part-time than I ever had at any of my full-time jobs. I eventually moved away from this work as I started making more steady income from my coaching services and products.

Advances in technology have made it possible to do so many types of work remotely, from coaching and consulting to web design. The most important piece of advice I would give however, is focusing on doing something in which you are truly interested. Pursuing a particular type of business or service simply because you think it will be easy to make money online doing it will probably backfire since you might not make money right away, and if that is your goal above all else, you’ll probably get frustrated and give up really fast.

You also want to work on your mindset, and deal with fears and limiting beliefs you have about working online and earning money for yourself head on. Succeeding in this arena requires a very different way of thinking, and if this isn’t addressed, you will not get the results you are looking for, no matter how much action you might be taking.

- Kelli Cooper (you can find out more about Kelli on Lifemadetoorder.com) 

Example 5 

I started my tech career working in the sales department for a major web hosting company. I spent all day answering questions for people who were interested in making money online. Most of the people I spoke with were interested in building a website for their retail business or were interested in creating an online store to sell products. The job was pretty easy because we had plenty of inbound inquiries coming into our department so it was not a very “hard sell”.

When I first started I didn’t really know much about the digital marketplace, inbound marketing, affiliate marketing or the like. The pay was not bad but It certainly could have been better. After a few years working in Sales, I moved over to the Marketing department. I was in the Marketing & Business Development department and was tasked with expanding our affiliate program. I soon realized that our affiliates (the successful ones) were making quite a bit more than I was for promoting our products and it was at this point in my career that I decided to make a change.

I stepped away from my professional career and decided to jump headfirst into the affiliate marketing world. I knew very little about affiliate marketing, search engine optimization, email automation and the like. I now consider myself to know a good bit more than your average person on this subject matter but the industry is constantly evolving and there is always more to learn. Affiliate marketing is an incredibly competitive field but it’s also very rewarding. If you are considering trying to make money online I would recommend you do plenty of research prior to jumping in.

- Mike Brown (you can read more about Mike on Thebloggingbudha.com) 

Money Definition 

Money is:

• meant to be spent wisely (although a lot of time it isn’t!); 
• generally seen as a significant economic unit for various transactional purposes; 
• used for buying products and services; 
• a financial gain; 
• gifted, calculated, deserved, undeserved, gambled, lost, inherited, taxable, and/ or gained;
• payment for the done work; 
• financial resources owned by somebody; 
• coins, banknotes, cryptocurrencies, 
• usually referred to in terms of currency - most popular currencies include the US dollar, the euro, the Japanese yen, the pound sterling, and the Canadian dollar. 
• said to have three functions (according to the Functions of Money episode, part of the Economic Lockdown Podcast series):
• a store of value:
• “If I work today and earn 25 dollars, I can hold on to the money before I spend it because it will hold its value until tomorrow, next week, or even next year. In fact, holding money is a more effective way of storing value than holding other items of value such as corn, which might rot.”
• unit of account:
• “You can think of money as a yardstick, the device we use to measure value in economic transactions. If you are shopping for a new computer, the price could be quoted in terms of T-shirts, bicycles, or corn. So, for instance, your new computer might cost you 100 to 150 bushels of corn at today's prices, but you would find it most helpful if the price were set in terms of money because it is a common measure of value across the economy.”
• a medium of exchange:
• “This means that money is widely accepted as a method of payment. When I go to the grocery store, I am confident that the cashier will accept my payment of money. In fact, U.S. paper money carries this statement: "This note is legal tender for all debts, public and private." This means that the U.S. government protects my right to pay with U.S. dollars.”

Money isn’t: 

• “the only answer, but it makes a difference” (Barack Obama); 
• supposed to be:
• stolen;
• abused;
• used for manipulation, corruption, and any form of bribery;
• capable of buying everything;
• the main purpose in life; 
• going to last if it’s managed badly; 
• the source of permanent happiness; 
• able to solve all your problems; 
• always openly discussed (for instance, in many countries and cultures it’s considered impolite to ask about someone’s salary or overall current finances and expenses); 
• going to replace the emotional connections you may be missing in your life; 
• capable of buying:
• friendships; 
• time;
• talent;
• love;
• loyalty; 
• mindfulness;
• manners; 
• confidence and self-esteem;
• inner peace; 
• a deep family connection;
• respect;
• intelligence and wisdom;
• worth stressing over (we don’t mean people who really don’t have money; we mean people that work more than they need to, at the cost of losing their health, developing anxiety, stress, and other worries).

The History of Money 

Throughout history, money has taken different forms (such as banknotes, coins, commodity money, and today even credit cards or cryptocurrencies), but its main function has remained the same - primarily to be a medium of exchange. 

The beginnings of money are traced back to bartering systems - basically, a direct trade of services and goods (for instance, a farmer may exchange his chickens for shoes from a shoemaker). 

We also have commodity money, such as gold and silver, which is similar to bartering, except that it usually has a specific, universally recognized value of exchange. We talk about the different types of money in our FAQ section, so make sure you read until the end. 

The eventual emergence and use of money shifted a lot of things. The first known banknote was created in China during the Tang and Song dynasties in the 7th century. 

With time, different currencies began appearing in various countries, which led to the so-called “currency wars”, where competing countries tried to change the value of their competitor’s currency by driving it up. 

The 21st century saw a rise in digital payments, such as mobile payments and digital currencies. Mobile payment, for instance, allows you to send money to family members and/or friends. Digital currencies, such as bitcoin, have literally revolutionized the world of money - their appeal lies in their decentralized control, as there’s no government or central bank involvement. 

That said, there are, of course, other types of money and currencies. The history of money, too, is quite rich. However, since that’s not the main focus of our article, we’ll settle for the basics - for now. 

Before we wrap this section up, we’d like to highlight the following: no matter how much the shape of money and its physical appearance has changed, its function and importance has remained the same.

Why Is Money Important?

There are many reasons why money matters, but its main function is to ensure stability and security so that we can afford living.

Having money means we can look after ourselves and our family by both satisfying our basic needs and also allowing ourselves some luxuries. Money is both practical and for pleasure. All in all, it brings a sense of comfort to our lives. 

But above all, money is a necessity. You may not be extremely wealthy and you may not even wish to be, but you still need to have at least a certain amount of money in order to move comfortably through life. This is important because money problems result in other problems in life, too. 

Lack of money can affect a person’s well-being, interpersonal relationships, and the way they perceive life in general. 

Finally, although material things aren’t the most important things in life, we can’t neglect the “physical aspect of life”. Plus, we can’t forget money also helps us buy a lot of experiences too, such as travel, a gym membership, etc., things that are valuable and significant for our personal well-being. 

How to Make Money? 

The first thing that pops up in people’s minds when they talk about making money is to simply find a job. But sometimes people may find that having a 9-5 job may not be enough to cover all their expenses, so they might search for additional ways to make some extra money. 

So, here are some suggestions as to how you can make more money*: 

• Start your own website (you can engage in affiliate marketing, dropshipping, and/or even offer your own products/services). 
• Invest.
• Drive for Uber (or whatever the equivalent in your country is).
• Become a market research participant.
• Start selling stuff on Etsy, Amazon, and the likes.
• Join platforms such as Fivver and UpWork.
• Sell photos online.
• Tutor students and/or offer coaching sessions.
• Participate in medical studies.
• Rent rooms on Airbnb.
• Become a tourist guide in your city. 
• Sell your old clothes. 
• Sell your old phones and other electronic devices you no longer need. 
• Try babysitting. 
• Take paid online surveys. 

*some of the listed ideas are regular jobs for a lot of people, but because most of them provide a flexible working schedule, they could be an extra option for others who want to earn more.

Whatever it is you end up doing, consider diversifying your income - having multiple sources of income ensures greater stability and more money. 

Examples of Money in Everyday Life 

Economy

There’s no single area of our lives where money isn’t involved. The education system, the healthcare system, a country’s overall economy, and so on. Some institutions need money but don’t have it, whereas others have it in abundance. 

There are many factors that determine why some sectors get more money, investments, and sponsorships than others. For instance, education is said to always lack money, and that’s because it depends only on “accepting” and “taking” money - it doesn’t make money itself so it may not be perceived as attractive an investment as other sectors. 

Then, there’s banking - the sector that probably matters the most when it comes to money. Banks give credits, support people’s investments, and keep people’s money. Even people who work at banks are expected to have decent salaries (no matter the job position). Here’s Hendrith Smith’s metaphorical take on it: “Banks are to the economy what the heart is to the human body. They cycle necessary capital through the whole, and they are barely noticed until pressure, necessity, or crises”. 

There are private businesses too, such as digital marketing agencies, wedding planning, one-on-one tutoring, psychiatric practices, pet shops, interior decorating companies, and countless others. When you’re running your own business (that is, when you’re your own boss), you have a lot to gain, but also a lot more to lose. 

Namely, when you have a private business to look after, not only do you invest money, but yourself as well. You’re the person in charge of the company. Plus, you have an image to maintain, a brand to develop, and a lot more responsibilities. For instance, you need to look after your employees' salary, their performance, whether they’re a good match for the company, and so on. Then again, it can truly be a rewarding experience to run your own business. 

Overall, there are many sectors and institutions we could discuss when it comes to a country’s economy. And the larger the country’s economy, the higher the people’s standard of living is. Of course, money management plays an important role - even countries and societies that have a lot of money risk losing it if they manage it badly. 

How to approach this? 

• Carol Roth said: “Many businesses fail because the owner wasn't willing to invest and wasn't educated on the difference between spending money frivolously and investing money into the business for growth, and the risks and rewards of that cash infusion”. Are you, yourself, able to make this distinction? 
• What do you think about taxation? 
• How do you perceive investments? Do you feel like you’re spending money purposelessly, or you understand that the idea is to multiply that money? 
• How comfortable are you discussing finances? And more importantly, how knowledgeable are you about it? For instance, do you understand concepts such as inflation, purchasing power, time-value of money, currency, and so on? (If you wish to go deeper with this, check out our course about money.)
• Have you ever gotten a loan from the bank? What are your opinions about it? Also, do you know what criteria you need to fulfill to be eligible for a loan? 
• Do you give money to charity? What do you think about this “activity”? Does it make you feel like you’re doing a good deed or as though you’re “giving money” away that you’ll never get back? 
• Have you ever been in debt (or know someone who has)? If yes, has this changed your overall perception of money? What did you (or that person) do? 
• Have you ever given money to a homeless person? Also, do you feel each country should allocate a budget to help the homeless and eradicate homelessness?
• How important is the act of choosing a bank for you? Are they all the same because they provide more or less the same services, or do you need to learn more details about each bank before reaching a final decision? 
• We live in a highly capitalist society - can you think of some disadvantages to it? Make a short list. Also, who benefits from it the most? 
• What do you think about your country’s insurance policy, retirement plans, and so on? 

Lifestyle 

Mandatory things 

Money is a very important factor when it comes to how we live our lives. It determines what we can afford and what our daily options are, in general, when it comes to spending it. A lack of money can be a great source of frustration, anger, sadness, and can result in a low quality of life. This is especially true if we’re not able to satisfy our basic needs, such as food, education, health, clothing, and so on. 

After all, no matter how much we’re willing to save, if our daily expenses surpass our overall income, it’s a sign of financial problems. 

Now, there are many “mandatory things” we spend our money on. As we already mentioned, there’s food, health insurance, the education we need to provide for our children (this is especially tricky in countries with universities that have high tuition fees), rent (or if you have your own apartment, you may need to invest in renovations every now and then), bills, and so on. The list is endless, but our money isn’t. 

Finally, there are always unexpected costs. A medical emergency, going for a regular car inspection and realizing something needs to be repaired, an eye exam due to problems with vision, home maintenance issues, and so on. These things happen more often than we care to admit, but this is where our saving skills are tested. So, saving money for a rainy day is definitely something to keep in mind. 

Non-essential purchases 

There’s a quote that explains what a modern version of Caesar would be like: “Caesar of the 21st century: I came! I saw! I bought!” (Ljupka Cvetanova). If we consider the society we live in, and the way we tend to spend money nowadays (as if there’s no tomorrow), then this makes perfect sense. In essence, we’re obsessed with buying “stuff”. 

That said, we long for experiences, too. There are a lot of hobbies we pay for (and actually almost all hobbies require some sort of financial investment), holidays (usually summer and winter, which means double expenses), going to the cinema or theatre, and so on. 

Still, nothing matches our need for buying physical things.

We enjoy buying stuff that makes us happy, like our favorite skincare products, the limited edition of a chocolate brand we enjoy, a new coat, and so on. And sometimes, even if you want to save, it’s not that easy. For instance, you’ve bought a present and you want to try and wrap it yourself to save money. However, you still need to buy the supplies, which costs money.

Plus, who can stay immune to Black Friday, other large sales, and online discount coupons? 

This is very much connected to FOMO (fear of missing out). Here are some FOMO stats that help us understand this phenomenon better: 

• Most of the emotions that were experienced alongside FOMO are negative: 39% reported feeling envious, 30% said they felt jealous, and 21% said they felt sad or disappointed. Only 29% reported feeling happy.
• 40% of millennials overspend or go into debt to keep up with their friends.
• 60% of millennial consumers said they make a purchase as a reaction to FOMO, most often within 24 hours.
• Those with household incomes above $75,000 a year were not only the most likely to experience FOMO, but also the most likely to share their experiences on social media with the intent of creating the sensation in others.
• The main things that invoke FOMO among millennials are travel (59%), parties and events (56%), and food (29%).
• 41% of consumers will be tempted to purchase a product with as few as 1 to 4 reviews.

How to approach this? 

• How important is money to you?
• Do you have problems saving/spending money? Do you perceive yourself as a price-conscious shopper? 
• Do you tend to buy second-hand things? 
• Do you gamble? In general, what do you think about gambling? 
• Do you prefer using a credit card to using cash? Why? 
• How often do you put money in the bank? Also, do you have more than one bank account? Why? 
• Did your parents give you an allowance? How did you spend your money when you were younger? 
• Have you ever owed money to friends/acquaintances/family members? 
• Have you ever bought lottery tickets? If yes, have you ever won? What was the feeling like? 
• Do you sometimes purchase things you don’t really need? Why? 
• Have you ever found money on the street? What did you do with it?
• Has anyone ever stolen money from you? What did you do about it and how did you feel? 
• How can you make/save more money? What are some luxuries you may need to give up?
• How much do you spend every month on:
• food;
• transportation;
• rent (if any);
• clothes;
• electricity, phone, internet, and water bills;
• going out and entertainment;
• childcare (if any)?
• How often do you go shopping? What types of things do you usually buy? 
• Can you name something you’ve recently bought that was a good bargain? 
• What do you think about discounts? Do you take advantage of them?
• What’s the most expensive thing you’ve bought in your life? Was it worth it? Would you buy it again? 
• Are you generally satisfied with your salary? Is it enough to cover your monthly expenses and even put some of it aside? 
• How much money would make you happy? Do you know how to earn it? 
• If someone gave you a million dollars, what would you do with it? What’s the first thing you’ll buy? 
• How much money do you usually spend on gifts? What’s the last thing you bought for someone else?

Famous Quotes about Money

“Money does not buy you happiness, but lack of money certainly buys you misery.” 

- Daniel Kahneman

“In regards to the price of commodities, the rise of wages operates as simple interest does, the rise of profit operates like compound interest. 

Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.” 

- Adam Smith 

“If your goal is to be comfortable, chances are you’ll never get rich. But if your goal is to be rich, chances are you’ll end up mighty comfortable.”

- T. Harv Eker

“To fulfill a dream, to be allowed to sweat over lonely labor, to be given a chance to create, is the meat and potatoes of life. The money is the gravy.” 

- Bette Davis

“Being wealthy isn't just a question of having lots of money. It's a question of what we want. Wealth isn't an absolute, it's relative to desire. Every time we seek something that we can't afford, we can be counted as poor, how much money we may actually have.” 

- Jean-Jacques Rousseau

“In the Middle Ages, the rich spent their money carelessly on extravagant luxuries, whereas peasants lived frugally minding every penny. Today, the tables have turned. The rich take great care managing their assets and investments while the less well go into debt buying cars and televisions they don’t really need.”

- Yuval Noah Harari

“It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” 

- George Lorimer

“Money is like a child—rarely unaccompanied. When it disappears, look to those who were supposed to be keeping an eye on it while you were at the grocery store. You might also look for someone who has a lot of extra children sitting around, with long, suspicious explanations for how they got there.” 

- Lemony Snicket

“Today, making money is very simple. But making sustainable money while being responsible to the society and improving the world is very difficult.”

- Jack Ma 

“I hope the way you spend your money is in line with the truth of who you are and what you care about. I hope that your money brings joy to you and the ones you love. And I hope you use it as a powerful force for good to fulfill your best intentions.” 

- Oprah Winfrey

“What he realised, and more clearly as time went on, was that money-worship has been elevated into a religion. Perhaps it is the only real religion-the only felt religion-that is left to us. Money is what God used to be. Good and evil have no meaning any longer except failure and success. Hence the profoundly significant phrase, to make good. The decalogue has been reduced to two commandments. One for the employers-the elect, the money priesthood as it were- 'Thou shalt make money'; the other for the employed- the slaves and underlings'- 'Thou shalt not lose thy job.'It was about this time that he came across The Ragged Trousered Philanthropists and read about the starving carpenter who pawns everything but sticks to his aspidistra. The aspidistra became a sort of symbol for Gordon after that. The aspidistra, the flower of England! It ought to be on our coat of arms instead of the lion and the unicorn. There will be no revolution in England while there are aspidistras in the windows.”

- George Orwell 

Frequently Asked Questions (FAQ) 

What is the best way to save money?

Most people will say that the best way to save money is simply by spending less. While this sounds perfectly reasonable, we believe there are many ways to save money, not just one. Read over our tips on how to save money to decide which one works best for you: 

• Make a financial calendar.
• Check your bank’s interest rates. 
• Get rid of your limiting thoughts about money (such as “I don’t have enough”, “I’ll never get the salary I need”, “I can never save enough”, and so on). 
• Set a budget and stick to it.
• Track your daily financial transactions.
• Open a savings account. 
• Set very specific financial goals.
• Focus on your recurring expenses. 
• If you get a raise, revise your retirement savings strategy, too (in other words, don’t just start spending more than the usual). 
• Stay away from FOMO (fear of missing out) propaganda as much as you can.
• Try to spend more on experiences, and less on things. 
• Go shopping on your own (that way, you’ll probably buy the stuff you truly need, as opposed to buying things your excited best friend thinks look great on you.). In other words, control your impulses. 
• If you’re paying off credit, make sure you check your credit report and finances regularly.
• Avoid getting into debt(or if you already have some, make sure they don’t pile up, as this creates unnecessary stress and money-related anxiety).
• Use the 30-day rule (when possible). In essence, write down what you want to buy and how much it costs, and if after 30 days you still feel you need to buy it, make a purchase.
• Eat in more (as much as eating out and ordering food can be tempting). 
• Designate no-spend days (make it a fun challenge). 
• Save money by allocating a budget limit for some basic expenses. For instance:
• switch to a cheaper mobile phone plan;
• work on lowering your utility bills; 
• use coupons, discount codes, and sales wherever possible; 
• consider buying second-hand; 
• plan your grocery shopping ahead. 

Money-savings Statistics 

You don’t need to agree with or even apply all of our money-saving tips. The important thing is to focus on several methods that work for you. 

In addition to these tips, we also want to share some money-saving stats to empower your quest further. First, we’ll discuss some general stats (based on US surveys), and then we’ll share average savings by age, as well.

So, here are the American saving statistics: 

• Americans have more than $1.29 trillion in personal savings.

• 36.2% of American families have savings for liquidity purposes.

• 23% of Americans can’t afford to spend $100 in an emergency situation.

• Only 30% of Americans have a financial plan that includes savings.

• 69% of adult Americans have less than $1,000 in a savings account.

• The average household savings in America are at $16,420.

• 31% of Americans say they can’t save any money because they live paycheck-to-paycheck.

And here are the average savings by age: 

• 41.13% of those aged 18-24 have no savings.

• 50% of those aged 25-34 have no savings.

• 40.91% of those aged 35-44 have no savings.

• 54.29% of those aged 45-54 have no savings.

• 40.24% of those aged 55-64 have no savings.

What are the different types of money? 

Money usually comes in three forms: fiat money, commodity money, and fiduciary money. Most modern systems make use of fiat money, but let’s briefly explain each type. 

Let’s start with commodity money. First of all, it’s important to understand that a lot of materials, such as conch shells, barley beads, gold, silver, and so on, have been used as commodity money. In general, this includes items or materials that are considered valuable. Commodity money has a so-called “intrinsic value” because it has actual universal value outside of its main usage. It’s also considered to be durable, exchangeable, and rare. 

Although we don’t tend to use commodity money nowadays as much as people did in the past, many such items still hold great value (especially gold and silver). 

Next, we have fiduciary money, where the value of money is based on trust. For instance, cheques are considered to be fiduciary money, as their value depends on the trust between the payer and the payee. Also, its value is guaranteed by society and the banks. 

Fiat money is money that is given value only because those who use it believe it has value - its value doesn’t stem from any inherent quality. Fiat money is a government-issued currency, which isn’t backed by a commodity such as gold, for instance. Many modern paper currencies (such as the US dollar) are fiat money. If too much of this paper money is released in circulation, it can result in hyperinflation. Overall, fiat money is money that’s backed by the government’s authority. 

What are some useful tips about money management? 

Money management refers to the process of tracking your everyday expenses, planning your budget, evaluating your expenditures and taxes, and so on. In essence, money management is a strategic technique that allows you to make the best with the money you have by spending it wisely. 

As Idowu Koyenikan said, “when money realizes that it is in good hands, it wants to stay and multiply in those hands”.

When it comes to money management, there are detailed steps you can take to ensure you’re comfortable with your finances. Namely, there are three golden rules when it comes to money management: 

1. Don’t spend more than you make. 

This is basic money management. Even children (although they don’t make money) are taught not to spend the entire allowance that their parents give them. If you always spend less than you earn, your finances will always be in check. This isn’t always easy, though. Most people have larger expenses than their salary or even multiple streams of income. 

To start with, try to distinguish between the “wants” and the “needs”, as oftentimes they’re quite different. This can help you get a clear idea of your financial priorities. 

2. Always plan for the future. 

It’s tempting to spend money you’ve put aside for rainy days. It’s very easy to say that you’ll make more money, or you won’t need it in the future as much as you need it now. Then again, this is how people fall into debt, have financial problems when they retire, and so on. 

That said, we aren’t suggesting that you should put all your money aside or that you shouldn't enjoy it. On the contrary - we think enjoying your money is as important as making it. But it’s also important not to get carried away and live as if there’s no tomorrow. After all, there’s a deeper sense of security when we know we have more than enough and we’re not going to spend all of it. 

3. Help your money grow.

Once your bank account starts growing and you have enough savings, we strongly recommend investing. This can be highly beneficial, especially when it comes to long-term saving strategies, such as retirement planning. There are many methods to do this. Here are some of the most common investment options: 

• stock market; 
• mutual funds; 
• real estate;
• gold;
• crowdfunding, and so on.

Remember, it’s very important to fully understand the type of investment you’re making. Otherwise, you risk losing your money, which is the complete opposite of what you’re trying to achieve. 

Finally, keep in mind that even if you do everything “right” (whatever that means in the context of investing), things can go wrong, and it’s not always easy to predict the outcome of an investment, especially when it comes to the stock market. 

Suggestions for Further Reading 

Many find reading about money frustrating, because it may remind them that:

1. They don’t have enough of it; 
2. They don’t know how to make more money;
3. They don’t see how they can apply the stuff they read about in real life. 

Whether you relate to some of these sentiments or not, we believe reading about money can be really inspiring - it may prompt you to start a new business, invest, change the way you perceive money, or simply improve your relationship with it. 

So, if you’re willing to dive into some resourceful books, here are our recommendations: 

1. Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence, by Vicki Robin, Joe Dominguez, and Mr. Money Moustache (Peter Adeney)

2. The Psychology of Money: Timeless lessons on wealth, greed, and happiness, by Morgan Housel 

3. The Book on Investing In Real Estate with No (and Low) Money Down: Creative Strategies for Investing in Real Estate Using Other People's Money, by Brandon Turner 

4. Personal Finance QuickStart Guide: The Simplified Beginner’s Guide to Eliminating Financial Stress, Building Wealth, and Achieving Financial Freedom, by Morgen Rochard CFA CFP® RLP®

5. Time, Money, Freedom: 10 Simple Rules to Redefine What's Possible and Radically Reshape Your Life, by Ray Higdon, and Jessica Higdon 

6. Happy Money: The Japanese Art of Making Peace with Your Money, by Ken Honda 

7. Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, by T. Harv Eker 

8. You Are a Badass at Making Money: Master the Mindset of Wealth, by Jen Sincero 

9. The Simple Path to Wealth: Your road map to financial independence and a rich, free life, by J. L. Collins

10. You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want, by Jesse Mecham 

11. The Infographic Guide to Personal Finance: A Visual Reference for Everything You Need to Know, by Elisabeth Lariviere, and Michele Cagan CPA

12. Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By, by Cary Siegel 

13. Manage Your Money Like a F*cking Grown-Up: The Best Money Advice You Never Got, by Sam Beckbessinger

Final Thoughts 

To wrap things up, money is a huge part of our lives, whether we like to admit it or not. We need it on a daily basis to satisfy both our basic needs, and to spoil ourselves a little every now and again.

That said, having money is not always enough - it’s also important to understand how the overall money economy functions, how to invest, how to save money properly, and how to plan your budget accordingly. 

If this sounds like something you’d like to learn more about, we invite you to join our online course about money. This is a topics we’re truly passionate about, so if you decide to take part in the course, you’ll learn the following: 

• the difference between price and value; 
• inflation, stocks, cryptocurrencies, and real estate; 
• money supply vs money demand; 
• buying experiences vs buying products; 
• saving vs investing, and lots more. 

Finally, keep in mind there’s an aspect we shouldn't neglect in when talking about money - ourselves. As Warren Buffett put it, “Ultimately, there’s one investment that supersedes all others: Invest in yourself”. 

So, what about you? How will you invest in yourself?