10 reasons why money is important in our life
Introduction
There are many opinions about money. On one side of the spectrum is the idea that money is the "root of all evil" and that it "cannot buy happiness." On the other hand, there is a huge financial industry of wealth building experts vying for your attention. The fact is that - like it or not - money is important.
Here are 10 reasons why money is important
#1. Money has changed the world
If money did not become the main currency, our world would look completely different. Based on archaeology, money – made of lead, copper, silver and gold coins – appears to have appeared in places like Asia, North Africa and Europe around the first millennium AD. There are several reasons, including the fact that the coins were durable, easily portable, and had their own value. More diverse groups could trade with each other. Political forces could also easily control money. Without money, we would still be in a barter system and our economies would most likely be much smaller.
#2. Money can lead to better goods and services
We need money to finance goods and services. Besides, we need money to make things better. Consider a smartphone. It's called a "phone," but it's really so much more. Money made it possible. Without funding every step—from design to software development to security updates—you wouldn't have a phone in your pocket. The same is true of progress in almost every field. New, improved products and services come at a price.
#3. Money is associated with happiness
The old saying "money can't buy happiness" doesn't seem to be true. A famous study from 2010 showed that life satisfaction increases with income. Interestingly, they found that emotional well-being (which, along with life satisfaction, measures happiness) stagnated when people earned $75,000. A 2021 study from The Wharton School re-examined this question and concluded that well-being continues to increase with income, even above $75,000. This is a connection that researchers will no doubt continue to explore.
Money frees you from working to survive
Why does money make people happy? There are several reasons. The first is that you no longer have to work to survive. If you hate your job, you may quit before you have another one ready. Getting fired won't ruin your life. Having money essentially “buys” you option, and the freedom to do what you really want.
#5. Money pays for more life experiences
Many people only think about material goods that money can buy, but they also pay for intangible experiences. Many often look back fondly on family vacations each summer or holiday season. These trips were only possible because of money. Money is associated with life satisfaction and happiness because it allows you to do more things.
#6. The money helps families support each other
When people are doing well in life, they most likely have help. Many receive financial help from family. When Jeff Bezos founded Amazon, his parents gave him $300,000. Even in families where a member is not a billionaire, money exchanges are common. The more money a person has, the more they can help family members or friends in need. This can create complex family dynamics, but for many families it is important.
#7. Money reduces financial stress
Finances are a huge source of stress for people. This can lead to negative consequences for mental and physical health. Many studies show links between depression, anxiety and poverty. Even for people who are not poor, money is still stressful. When one's finances are stabilized, financial stress is greatly reduced. They may still feel anxious about money, but financial stability means less stress.
#8. Money can strengthen communities
Community service organizations need money. All gifts matter, whether small or large. It is also important for many organizations to get government money and grants. Without money, there would be many services that would disappear overnight, such as food banks, domestic violence shelters, after-school programs, and more.
#9. Having money helps you make money
When you look at articles that focus on how a 30-year-old became a millionaire, chances are you'll see more than just "worked really hard" or "got a high-paying job." The vast majority of the time they had a big financial boost somewhere along the way. Often it involves buying real estate or investing in the stock market. That takes money. The need for money to make money makes sense given the cycle of poverty. Research consistently shows how difficult it is for people without financial assistance to "break out" of the cycle.
#10. Who has money (and who doesn't) determines violence
The financial composition of the area is closely related to the security of the area. According to Martin Daily, professor emeritus of psychology at McMaster University in Ontario, inequality predicts homicide rates better than other variables. Note that income inequality is different from poverty. With income inequality, there is a mix of income levels, which can lead to mistrust, social tension and ultimately violence.
This is important to know because even if no one in an area is considered "poor", there is still a risk of violence if there is significant inequality. This challenges the idea that ending poverty will end crime. Research would suggest that the bigger problem is inequality.
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