In a world of financial, crisis, with money tight and a time where eveyone seems to be feeling the pinch maybe it’s time to go back to basics and rediscover for ourselves what money is and how we should use it.

Money is just a token, it has no real value in itself. The notes you have in your wallet really are only worth the paper they are printed on but the government adds value to it by agreeing that it has a certain value and everyone else accepts that too, which gives the note a value far greater than the paper itself.

Dealing with money is easy but dealing with money can be hard too. It is because money is such a simple concept that it can be used in lots of different ways that make it complicated. We don’t get taught very much about money and how it is used and most of us will have found that the first time we need a mortgage is the time we start really learning about mortgages. So, it is with credit cards, investments or anything else. It is a steep learning curve where we don’t fully understand and there is someone else trying to sell us a product that they do fully understand. Sounds like a recipe for disaster doesn’t it? Sometimes, it is.

A simple transaction is easy. I give you money and you give me the goods but what if I don’t have the money right now? You may accept that I will pay you in the future if you give me the goods now.
This all works well until it gets to the time I am due to repay you but I don’t have the money. This is the time that everything falls apart. I may have had every intention of repaying you but if I don’t have the money there is nothing I can do.

If the loan was for property then you may be able to recover the property and sell it to get your money back but if the loan was just a simple cash loan you may have to resort to debt collectors and possibly renegotiate the agreement we have.

Money is simple until it is loaned or borrowed and then you start to lose control of your money and your life. No longer do you earn some money and you can do as you please with it. Now, you have to allocate some of it to repaying your debts and your life is no longer your own.

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Filed under: Debt • Money

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