November 22, 2009
UTNE READER

Making Friends with Your Finances

(Page 2 of 5)

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According to anthropologists, money was probably first used not in trade but as a convenient substitute for sacrificial animals in religious ceremonies and for the paying of tribute to overlords. Early money could be anything from stones to shells to nails. One particularly important form of money, coins made of a precious metal, originated in the early sixth century B.C.E. in Asia Minor (today’s Turkey) and spread quickly throughout the ancient world. Soon, laws mandated that coins had to contain a certain percentage of gold or silver by weight, and the odd idea that the value of money was “rooted” in the “natural” value of precious metals was established. These metals were valuable mainly because they were shiny and rare. Nobel-winning economist Milton Friedman, the godfather of today’s right-wing libertarians, explores the paradox of money in the Encyclopedia Britannica (1985 edition). The real reason money works, he notes, is that people accept it in place of goods. Why? “Because they know others will. The pieces of paper are valuable because everyone thinks they are.”

So it’s not too much to say that money’s value resides in our heads, sustained by what we think others think. Is it any wonder that money has a powerful psychological charge? That in many ways it’s a head game?

To begin with, we live in a culture in which the getting and handling of money is considered to be the main business of life. To be flustered by money is to fail in some basic way to live up to our culture’s idea of adulthood. Money also has a stunning power to symbolize primal states of being—like love, power, and safety. Beliefs about money nurtured in childhood can wield profound influence on our whole lives. Kids brought up in poverty are famously prone to feeling that “there never will be enough for me,” or that everything has to be wrenched by force from a hostile world. Children brought up in wealthy homes, on the other hand, may develop a compulsion to bestow gifts as a way of “earning” their good fortune and obtaining love. Or they may, as psychologist Robert Coles has shown, develop a morbid fear of economic failure, which they see as letting down not just themselves but the whole family line. At any economic level, family taboos on talking about money can leave children mystified about it, irrationally fearful or ignorant of it. These people may end up living in a dangerous economic fog, hoping that money will always (somehow) come and always (magically) be enough.

Yet who can blame us for being reticent to talk about money, about what we earn, what we’re saving, how it’s going, and how we feel about it? It’s dangerous territory. In such discussions our deepest fears and phobias are just millimeters below the surface, sure to emerge.

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