Most of us don’t have a healthy relationship with money. We think of it as enemy—something that constantly gets in our way, or we think of it as a goal, something that will solve all of our problems. In reality, money is just a tool. Realizing this changed my habits in some interesting ways.


It’s easy to say “money is just a tool” when you have a lot of it, though. When you don’t, it feels impossible to look at money this way because so many of our problems are money problems, and those problems are big: you can’t afford rent, you can’t afford to leave your terrible job, you can’t afford to travel outside of your neighborhood. It’s impossible to see money as a tool because money is an enemy. Or, like me, you see money as a goal, a solution, and you allow it to run your life.


Money is not the enemy or the goal, though. It’s just a thing you use on your priorities. Sometimes your priority is just keeping your head above water and paying rent. You depend on money in this case, but it’s still a tool.

The truth is, though, those problems don’t magically go away just because you say, “okay, money’s a tool.” You still have the same problems, you still have to pay rent, but this perspective is crucial for one big reason: it helps you feel in control. It chips away at fear and makes room for you to shift into the driver’s seat. Even if the process is gradual, that shift is what changes your situation. Here are some examples of how that works.

It’s Easier to Come Up With a Strategy

It’s hard to make money plans when you’re afraid of money. You don’t bother budgeting your spending because looking at your bank account gives you anxiety. You don’t bother crunching the numbers because they never add up, and even if they do, it’s impossible to stick to. You chalk it all up to being impossible. When you think of money as a tool, you can focus on solutions over emotions, because there are clear ways to best use that tool. This post from author Carl Richards changed my perspective, and in it, he explains:

This shift in thinking is definitely subtle, but it changes our feelings about saving and spending. We no longer need to think in terms of good and bad, positive or negative. We’re focused on the outcome of our actions.


Richards really says it well here—it’s just a mindset shift, but it’s a mindset shift that’s focused on action, and when it comes to personal finance, that’s everything.

It starts with a meaningful goal. Money itself is not the goal. You have to know how you plan to use that money. Is it to feed your family? Pay down debt, or outstanding medical bills? Travel? Either way, when you know the end goal, you can work on your strategy for using money to reach that goal. Your plan might be:


When you think of money as a resource or a tool, that implies it’s to be used, so in a way, you give yourself permission to use it. Yes, it takes a lot of work, and it’s not exactly easy to use, but it’s a lot easier to come up with a plan when you think of money in these terms instead of as a roadblock, even if it feels that way.



You Get Over the Guilt of Spending

We all know that it often pays to splurge on quality. For example, a University of Michigan study tracked toilet paper purchases of more than 100,000 American households for seven years. The study found that high income households bought toilet paper on sale 39% of the time, compared to 28% for low income households. High income households also bought more rolls on average compared to low income households.


Overall, low income households paid about 6% extra per sheet. Here’s what the study concluded:

the inability to buy in bulk inhibits the ability to time purchases to take advantage of sales, and the inability to accelerate purchase timing to buy on sale inhibits the ability to buy in bulk. We find that the financial losses low income households incur due to underutilization of these strategies can be as large as half of the savings they accrue by purchasing cheaper brands.


To be fair, when you’re living hand to mouth, you can’t always afford to buy quality. Even when you can afford it, though, some of us still have a hard time paying the extra cash. For a long time, I had a problem with this. I’ve always been afraid of spending money because I’m afraid of not having it. I feel guilty for spending more than I have to spend, even if it’s on something as simple as toilet paper. Again, Richards says it really well:

Tools are meant to be used. They’re not meant to sit on a shelf and collect dust. Instead of thinking in terms of saving and spending money, I started to think of using it....Money is meant to be used, to be in motion. It circulates from us to other people then back to us again. Even when we save money, we’re simply storing it for use later. When we use money today, we’re not spending it or blowing it. We’re using the best tool available to get the job done...


I realized I had a bad habit of idealizing money, which made me feel guilty for spending it. I realized I could be frugal and still spend lavishly because frugality isn’t about saving money: it’s about using money, as a tool, efficiently. Sometimes buying quality is just an efficient way of using that tool.



Since learning to look at money as a tool, I’ve also noticed that it’s much easier to resist impulsive spending.


We’ve talked about prioritizing your spending before, but sometimes it’s still hard to resist, even though you know that phone upgrade isn’t a priority. I’m aware that there’s a wrong way to use this tool and I’m aware it can screw up the way I use it in other areas: it’s a limited resource. This practical awareness makes it a lot easier to resist.


Saving Money and Making More Money Aren’t Mutually Exclusive

To increase the amount of cash in your bank account, you can save more of what you already make, or you can earn more cash. For a long time, I thought of the two as mutually exclusive—do I save more or do I earn more?


When money is the goal, it’s natural to think in these terms. When my mindset shifted, though, I realized saving more and earning more were just methods I could use to reach my larger, more meaningful goals: to support a family, to travel more, and to have more time to work on my own creative projects. I could save more and earn more to facilitate my goals.


I could also pinpoint when saving more and earning more became counterproductive. Sometimes, these methods actually hurt rather than helped my goals. For example, some money saving habits were a complete waste of my time. My goal was to have more free time to work on my own projects, so this became counterproductive. Sometimes I’d take on work I didn’t enjoy just for the extra cash. That was counterproductive, too, because I had less time to spend on my projects.

In short, viewing money as a tool helped me prioritize my goals and weed out the inefficient ways of using that tool to accomplish those goals.


How to Shift to Thinking of Money As a Tool

Personal finance has everything and nothing to do with money. It’s about learning how to use money in the best way possible to live the life you want.


Of course, “think of money as a tool” is a lot easier said than done. Even now, after being fully inspired by Richards’ post, I struggle not to idealize money. A few things have helped keep my brain in check, though.

Define What Matters: Since money is not the goal, it helps to know what the goal actually is. This is why a lot of financial planners start clients off with a single question Create Spending Priorities: It also helps to make a list of the spending that brings you the most joy. Aside from your needs, that’s going to be the best way to use your income. This means prioritizing the things you love Take Small Steps: Again, “money is a tool” is a lot more difficult when you’re struggling to get by. Any goals just seem insurmountable compared to the income you have to use toward those goals. It helps to focus on small steps and tiny actions.


Breaking up your goals into smaller milestones can make them a little less overwhelming. If you’re trying to pay off $40,000 worth of student loan debt, for example, think about your payoff in terms of years or even months or weeks. $50 a week is a lot more doable than $40,000, and again, while this is just a mindset shift, it makes your goal a lot more action-focused. When you’re focused on action, you’re more likely to take action and feel in control. It makes it a lot easier to see money as a practical tool rather than some scary milestone.


For most of us, money is symbolic of something much larger than it actually is. It reminds us that we don’t have enough. It reminds of the things we can’t afford to do. At its core, though, money really is just a tool. It can be a powerful one, especially when you don’t have enough of it. A simple shift in mindset isn’t going to change your financial situation overnight, but it’s a necessary step in getting your finances under control.

Illustration by Sam Woolley.