Holland Column

Retirement & Financial Planning

Holland Financial

When Did We Stop Touching Money?

The times they are a changin’. I think back to my childhood and how people bought everything with cash – paper money, that is. Then, as the years went by, I remember waiting patiently in checkout lines while customers wrote out personal checks. Now, almost everyone pays for their groceries, and just about everything else, with little plastic cards. Have you ever taken a moment to think about how the whole concept of money has changed over the years? How do people, especially youngsters and teens, make buying decisions based on the “idea” of money when there is no physical manifestation of dollars in their pockets, purses or wallets? As human beings, we understand the world based on what is tangible – things we can actually hold in our hands. But now, money is an “abstract” concept, isn’t it? Art Markman, Ph.D., author of Smart Thinking, and I discussed this phenomenon at length during a PlanStrongerTV™ program.

So, what happens when the items you are buying seem more “real” than the money with which you are purchasing them? And, just how much of tomorrow are we “mortgaging” to pay for what we want today? We are not thinking of our wants and needs five years from now as we make big purchases. Maybe it’s a state-of-the-art, jetted hot tub, or a luxury, hybrid-foam mattress that can be paid off in 60 easy installments of $47 a month . . . Are we thinking about what we are giving up in the future to have that item now? Trust me, “Future You” might not be too pleased with “Past You,” if you’re not more careful with your spending today.

With kids, especially, it’s important to put some distance between their “wants” and their ability to buy things right away. Often, it’s hard for children to realize that they can’t have everything they want immediately. It’s an especially hard transition into adulthood, if everything they’ve ever wanted has been accessible with the touch of a button on a computer keyboard. We’ll talk about this at greater length in an upcoming column.

As adults, each one of us must take responsibility for living within our means. Don’t borrow money for the kinds of things that don’t require you to borrow (a house, maybe “yes” – a hot tub or luxury mattress, probably “no”). Most of the time, you’ll find that expensive items, bought on impulse, won’t bring you happiness in the long run anyway.