Taking Money Out of the Equation

It’s interesting how much we let money (either the lack of it; or the potential amount of it) influence our decisions. We don’t take money out of the equation when deciding what we really want. Now of course, on a certain level this makes a lot of sense.

For example, if we don’t have $40K a year to go to a private college, we shouldn’t take out student loans to do so. Yet many people do exactly that, reasoning that graduating with a degree from a “good school” is important — even though they’ll start out their adult life $160K in debt. Which I think is handicapping at best, and usually based on not understanding the full impact of borrowing that money.

On another level though, it doesn’t. For example, take the question about whether or not my car would really be ok or not afterward if I were to repair it after its accident. The vast majority of people that I talked to about it skipped right to “well you could get another car for less”.  Which of course I know. I could also spend $0 and literally save money each month (because I would no longer be spending money on gas or insurance) by not replacing it at all. Or they focused on the $8K estimate, which is of course a lot of money. Neither of those matter though, if the car would no longer be safe if it were repaired. That’s the first question, and it’s completely unrelated to money. In that case, it would make perfect sense to take money out of the equation.

The money paradox

The point is, there seems to be this paradox when it comes to money. Part of the time, we completely ignore it when we shouldn’t, and part of the time we give it way too much sway over our decisions when there’s no reason to. Sometimes, of course, it’s a mix of both.

Yet I think people in general tend to spend too much time at the extremes.  They run up debt because they buy things they can’t afford, or they spend hours of every day in jobs that they hate because they need the money.

A balanced approach

A more balanced approach would be to take money out of the equation so that you can figure out what you really want, and then put it back in while you’re figuring out how to get that.

For example, if it’s your hearts desire to attend that private school, but you don’t have a spare $160K laying around, you could find a way to attend that didn’t involve handicapping yourself with a huge amount of debt.

Or if you hate your job but can’t afford to quit right now, rather than remaining miserable you could take steps to change your life.

Keeping money in the equation IS important, but there’s a time to take it out before putting it back in. Allow yourself to really consider what matters to you, and then how you can get that in a financially sensible way. You’ll end up with a lot more options, and will probably be a lot happier too.


  • For me money help establishes value. I view almost all my purchases on a value basis. I ask myself if I get enough value of a particular purchase to determine if I should buy it or not.

  • I really like about not taking out student loans. I totally agree with you, and have seen first hand the devestation caused by people taking out student loans. They go to school thinking that they’ll get a job right away. That’s not always the case!

    • Or sometimes even if they do get a job right away, it’s not in the field they wanted, or as high-paying as they thought it might be. Or they don’t finish, or decide they want to stay home with the kids, etc.

  • I think going to college and having some (let’s be reasonable here) debt is a short term set back in achieving a lot term goal. There is a huge difference in my mind between education and cars.

    • There are plenty of ways to go to college without debt though. You can even get an MD for free. (I know two people who have done so.) But, the point wasn’t really about college, or cars, or jobs. It’s about figuring out what you really want, and THEN bringing money into consideration.

  • I am unfortunately in a lot of student loan debt, because at the time I did not have any personal finance information and taking out a loan seemed like ‘the thing to do’. Seeing what a hindrance debt has been to our desires, I definitely agree that money has to be put in the right perspective to become the tool it was meant to be and not the crux by watch we succeed and fail in our lives.

    As we pay off our debt, we are trying to keep our true goals in front of us without making every penny a source of stress.

    • I think a lot of people are in your position, because unfortunately it’s become so “normal” that folks no longer consider alternatives. Sounds like you’re going about getting out of debt in a good way though.

  • It makes sense to focus on what you want and then go for it. Find out what you want, and let money come later to make it happen. Of course, it might also work well to simply make as much as possible while limiting expenses!

    • Well, I don’t think just going for what you want and then letting money take care of itself somehow is usually the best course, because we generally have to DO something to make the money part happen. But I’m with you on making as much as possible and limiting expenses!