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drawing of a crutch as dependency on a tool

❝The real measure of your wealth is how much you'd be worth if you lost all your money.❞ -unknown

Laurie is leaving the restaurant after having lunch with close friends. It's a tight squeeze in the parking lot, making backing out of her spot quite difficult. But, Laurie's a pro. She's been driving for a long time. More importantly, her new car comes with sensors that alert her if she gets too close to anything while backing up, and even hits the brakes for her if she doesn't do it in time.

What a nice tool to have!

Two months later, she goes on a trip to wine country in Napa Valley. She and her friends think it would be fun to rent a convertible during their trip. They end up renting a vintage convertible to cruise up and down the roads.

After dinner one night, Laurie was backing out of her spot and slammed into a concrete wall!

She never checked her mirrors or looked behind her. She was so accustomed to having sensors, alarms, and automatic brakes that she kind of forgot how to back up her car.

If we're not careful, any tool - including money - can cease to be a tool and turn into a crutch.


Money is not a goal, but you'd be forgiven for making that assumption. There are very few life decisions that don't have a financial component and few financial decisions that don't impact your life somehow.

Money touches every area of our lives.

drawing of the overlap between money and life

In our society, it can feel like money should somehow be a goal - a goal to acquire it or to have it.

You may know people who have goals of making $100,000 per year (or $1 million or whatever) or a goal of having a net worth of $1 million (or $100 million...). There are even more subtle ways of having money goals. Some people have a goal of retiring by 65, 55, or 40.

Just having a pile of money, though, doesn't lead to happiness.

drawing of money doesn't bring happiness

Inevitably, just having money in and of itself is worthless because you can't take it with you.

drawing of you can't take it with you

Money, as a goal, doesn't make sense.

drawing of money is not a goal


Money isn't a goal. In other words, money isn't an end; it's a means.

You may have heard the statement "means to an end." Means are what we do in order to get something we want. The topic of means and ends could be a post of its own, but for our purposes, suffice it to say that means don't satisfy us except as a way to get a particular end.

drawing of money is a means, not an end

Ends, on the other hand, are a particular outcome we want. Ends are what we would want if we couldn't tell anyone (because if we wanted recognition or praise, that would be the end and the thing would be another means).

Money can never be an end because it's worthless by itself. Think about being on an island by yourself with all the money you could ever need. It wouldn't help you.

As an even sillier example, imagine someone in prison who collected all the prison money (aka cigarettes) and then was released. All that prison money is worthless on the outside.

drawing of money can never be an end

Instead, money is a tool. It's a means. Tools are useful. They help us become more efficient.

Think of money like a calculator.

drawing of a calculator

It makes it far easier to compute big or complex numbers in no time. Using tools properly makes our lives better. It helps us accomplish what we want to accomplish.

Money is a tool to help us accomplish what we want to accomplish.

drawing of tools make life easier

The Value Compass is designed to help you gain insight into your own values and how they guide your thoughts, feelings, and actions. It can be used to explore your personal goals and motivations, as well as to gain a better understanding of others' values and how they may differ from your own.


Sometimes, though, we use a tool so much that we forget how to do the job without it. If we can't get by without the tool, we've become dependent on it.

drawing of dependency on a tool is a crutch

In other words, instead of assisting us in accomplishing what we want to accomplish, we find ourselves unable to function without the tool.

drawing of dependency on something helpful

If we go back to our calculator example, becoming dependent on it means we don't know how to do basic calculations in our heads anymore.

Laurie, the lady who rented a car in wine country, became dependent on backup sensors and forgot how to back up a car.

Using money as a crutch is to use it to avoid problems by throwing money at them. It's what happens when we can't use money as the lens through which we view our identity and our lives.

drawing of when a tool becomes a crutch


The antidote to using money as a crutch is to understand what it's for. Money is a tool, but what the tool gets used for is up to you.

Money's role in your life is what I call financial purpose. It defines what you want out of life and how money can help.

drawing of financial purpose

Once you've defined your financial purpose, you can distill it down to a simple statement that can be used as a filter that you run your financial decisions through. It serves two functions. First, it gives you permission to use your money in a way that is consistent with your values and aspirations. Second, it helps you cut out things that you don't actually care about.

drawing of financial purpose statement

Money's not a goal, but it's not a crutch either. Understanding money's role in your life helps you use money as a tool to live a meaningful life.

You get one life; live intentionally.


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Ariely, Dan & Jeff Kreisler: Dollars and Sense Clements, Jonathan: How to Think About Money Dunn, Elizabeth & Michael Norton: Happy Money Hagen, Derek: Money’s Purpose in Your Life Hagen, Derek: Your Money, Your Values, and Your Life Kinder, George: Seven Stages of Money Maturity Krueger, David: A New Money Story Krueger, David & John David Mann: The Secret Language of Money McKay, Matthew, John Forsyth, and Georg Eifert: Your Life on Purpose Millburn, Joshua Fields & Ryan Nicodemus: Essential Newcomb, Sarah: Loaded Robin, Vicki: Your Money or Your Life Shapiro, Stephen: Goal-Free Living Wallace, David Foster: This is Water Ware, Bronnie: The Top Five Regrets of the Dying



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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