Hidden Values of Money

When people talk about money, they usually bring things up like budgeting, debt, retirement, interest rates, etc. Which are all important topics. Not too many talk about the hidden values of money though. 

The Obvious: Food, Shelter, and Essentials

There’s the obvious around what money provides: food, shelter, essentials, entertainment, and general funding of a lifestyle. These are all tremendously important things but won’t be the focus of this post.

Is All Money the Same?

All money isn’t the same. Money serves different purposes and functions. For example, an emergency fund is a backup for the unknown while money in an investment account is meant for growth. Cash in a checking account is designed for daily living and paying bills. All different but important functions.

So there’s more to money than meets the eye. It’s not all the same, and when you adopt this approach, it helps to make budgeting and allocation of funds make more sense.

Hidden Values of Money

The remainder of this post will be dedicated to the hidden values of money–the things rarely talked about, but important in their own way.

Number 1: Safety and Security

Think about this hypothetical scenario. James grew up without a lot of money. Money was hard to come by and enough food for the day wasn’t always a guarantee. Although he always had steady housing, there were many nights where he went to bed hungry.

James is now a successful adult–good job, dual-income household, saving and investing regularly. The biggest win for him though is the safety and security that money represents. Having a cushion of money he can fall back on and not have to worry about food is an invaluable feeling to him.

James enjoys being able to invest and have some discretionary income, but nothing beats the feeling knowing he has enough to provide for himself and his family.

Number 2: Peace of Mind

Similar to safety and security, money can offer peace of mind. For example:

• Having an emergency fund gives you the peace of mind that if something unexpected were to happen, you would have it covered
• Investing regularly provides security that you’re on track for financial independence and eventually a well-funded retirement
• Basic financial literacy gives peace of mind that you will be able to pivot and adjust during various economic times

Peace of mind is a big deal. It’s nice to have a big house and nice cars, but peace of mind is a feeling that allows you to go about your days more freely and with less worry. It’s hard to put a price tag on it, but when you’ve felt it, you know the benefit.

Number 3: Options

Consider this scenario. Trevor and Sam work in the same company. Trevor has six months of an emergency fund saved up, invests regularly, and intentionally lives beneath his means. Sam spends it as it comes in, lives check to check, and says he’ll invest “when he’s older.”

Trevor and Sam’s well-respected boss leaves for a new job. The company decides to bring in someone from the outside who has been a nightmare the first six months on the job. Both Trevor and Sam have been miserable at work and looking at other options.

A month later, Trevor and Sam’s old boss connects with both of them offering a new position with less demands and hours. The catch is that it’ll be a ten percent pay cut. After weighing it out, Trevor decides to join his old boss because he wants a better work/life balance. Sam wants to take it too but can’t because he can’t afford the pay decrease.

In this instance, money gave Trevor options but Sam is stuck for the time being. Having an emergency fund, being out of the paycheck to paycheck cycle, and having money invested allowed Trevor to feel comfortable leaving for less money. While Sam doesn’t have that luxury.

Number 4: Protection Against the Unknown

If I’ve learned anything in my 45 years on this planet, it’s that there is the unknown. The unexpected happens. Risk can be minimized, but it can’t be completely eliminated–there’s just no way to predict all the unexpected.

In the last five years alone, I’ve had these unexpected things happen:

• Car caught on fire and burned to the ground
• The otherwise healthy family dog had a series of costly vet bills
• Repairs to a rental property were a lot more than expected

It’s not shocking these things happened (other than the car fire) but none of these things were exactly on my radar. I’m really glad I had the ability to deal with them. The unknown is impossible to predict, why not have a cushion of money to protect against it?

Number 5: Access to More Opportunity

A major hidden value of money is simply access to more opportunity. Think about these potential opportunities:

• An opportunity to invest in a business with great upside
• One of your friends tells you about a rental property she has to sell and wants to give it to you at a major discount
• An old friend from your first job wants you to join him at his new startup that has the potential for huge growth

All of these opportunities require money (or raising money) to take advantage of them. The person with some cash will at least be able to decide if they want to take advantage. While the person without money, or ability to raise it, will have to sit on the sidelines.

Conclusion

There are hidden values of money. Personal finance is personal and money provides a different value to everyone. 

Someone who grew up poor might really value having a large emergency fund just in case. Same for someone who has been burned in a business endeavor where they fell short on cash and had to file for bankruptcy, or had a major financial consequence. 

Most people understand that money provides basic things like food, shelter, clothing, but most people haven’t thought much about their own hidden values of money. So think about yours and design your life to be in line with them. 

What are your hidden values of money?