What Motivates Your Finances?

by Miranda Marquit · 15 comments

One of the issues that can get in the way of a solid financial future is ignorance of your own motivations. Many of us are not used to self examination, especially when it comes to finances. This is because we often think of our money as something that comes in, and then is saved and spent. We rarely think about why we do certain things beyond acknowledging that we are saving “for the future” or that we need to “pay the bills.”

However, in order to understand your finances better, it can help to thoughtfully consider what motivates you to do what you do. In some cases, you might discover that some of the money decisions you make have no basis in what you are interested in accomplishing.

Quality of life

Money Motivations

Most of us have a variety of reasons for the choices we make. These motivations may even be somewhat obscure to us, since we haven’t made an examination of them. You can get started on uncovering your own financial priorities and values by honestly considering whether any of the following motivate you:

  1. Status: One of the biggest money motivators is the desire to impress others. We talk about “keeping up with the Joneses” quite a bit in the personal finance blogosphere. It can be brutal to recognize that status is one of the reasons you make the spending decisions that you do. But it is a very real motivator, since many of us inherently want to fit in — and that includes having what others have. Of course, the desire to impress can also motivate generosity and charitable donations. Many use their desire to appear generous as a motivation to donate large amounts of money to worthy causes.
  2. Survival: In some cases, financial motivation comes from the requirement to achieve the necessities of life. Putting groceries ahead of entertainment could indicate that you are more focused on making sure you have what is needed to survive. Decisions to work extra jobs or cultivate additional income streams might also be based on survival.
  3. Fun: In some cases, financial decisions are motivated for fun. The desire to live in the moment, and spend freely, could be motivated by an attitude of enjoying oneself immediately, rather than thinking ahead. On the other hand, many people save up for lavish vacations, intent on having the most fun possible on a trip, rather than spending the money as it comes in.
  4. Quality of Life: Many make decisions based on quality of life. Some feel that having more things makes them happy. Others would rather spend money on experiences, and care little for the material items in their homes. Quality of life spending decisions can also include purchases made for personal comfort. On the flip side, the decision to participate in frugal family activities, such as picnicking, might mean that your quality of life is influenced by quality family time.
  5. Financial Stability: For those in debt, money decisions might be motivated by reaching financial stability by paying down obligations. For those with an eye to the future, financial stability might mean setting aside more in retirement investment accounts, rather than doing certain things now, so that you have a more secure financial future. You can also take it another step further. Why do you want financial stability? Is it so you are in a position to help others? So you have fewer worries later? Or so you can do what you want to do now?

Before making your next financial decision (especially if it is a purchase), stop and ask yourself why you are making that decision. Probe your decision and honestly evaluate the reasoning behind it. If you don’t like what you see, maybe it’s time to set new priorities and find new money motivations.

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{ read the comments below or add one }

  • AJ says:

    I’m definitely in it for the financial stability. I want to retire comfortable. The added incentive is I’m single and don’t believe Uncle Sam will be there to help forever. Unfortuately, Uncle Sam is falling back much sooner than I anticipated, but Social Security was never meant to be a pension plan, it was a suppliment, nothing more.

    On another note, I’m new here and was wondering if there is a blog area where we can start conversations and ask questions. Thank you! -AJ

  • Jason says:

    Status and the quality of life for me.
    We need to have some goals 😉

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  • Joel Gray says:

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  • You know, my motivation is the combination af all mentioned above. To my mind it is impossible to separate these types of motivations. One follows the other and throughout the life people are moved forward by some of these reasons. But still the article is great. Thanks.

  • Greg McFarlane says:

    People seriously are motivated by status? Still? I find this fascinating. I’m not denying it exists, I just think it’s idiotic. Damned if I know where to find the data, but I’d bet a higher proportion of BMWs get repoed than Hyundais do.

    There’s nothing wrong with paying a lot for something, if it’s an asset – i.e., if it’ll help you gain wealth or cash flow. A nice house might. A nice car won’t. Buy one if you want, but see it for what it is – a liability.

    I drive a beat-up SUV that’s literally been around the world. It’s ugly, it’s scratched, it doesn’t smell all that great some days. My acquaintances in their shiny Mercedes and Audis make fun of it, but they’ve never seen my house (or my 4.5% mortgage.)

  • Jenna says:

    What motivates me financially is the ability to work hard to play hard. I like knowing I can make enough money to enjoy the things I love to do now and in the future.

  • vered says:

    The desire to gain status really bothers me. I realize it’s very human and natural, but I still try very hard to fight it – not always with success.

  • MoneyNing says:

    My motivation has turned to reaching a point where I can just call it quits (whether I choose to or not).

    I believe one’s motivation changes based on unique situations though. At the very least, as we all become wealthier, the focus has to change from survival to other reasons like fun, quality of life etc.

  • CD Phi says:

    For me personally, I’d probably say that quality of life is of utmost importance. I need to be able to do the things that I want to do in life whether that means traveling or even fixing up my home. Because of that, I always budget my money in terms of my short-term and long-term goals.

  • My motivation is simply to be able to do what I always what to do, whenever I want to do it.

    Like right now. I hurt my leg the other day playing sports. I’d rather sit in my pajamas and read, comment, and surf the web this morning rather than get on a wretched bus and stand for 25 minutes to get to work. Unfortunately, no can do today.

    Making money to me is also a fun game. But ultimately, money is just a currency for something else. I’ve been fortunate to be able to make some money, now I just have to spend more freely.

    • MoneyNing says:

      I hope your leg gets all better really soon.

      Maybe you can start spending by taking the taxi to work for a couple days.

    • AJ says:

      Financial Samurai,

      I have had bad feet for over a decade. When waiting in lines at a store or bus stop, I’ve used a golfer’s seat sold at Dick’s Sporting Goods for about $20. It’s very handy and keeps me from having near as much pain.

      Of course, this is really only a suggestion if your situation is longterm. Don’t spend the money for a just a few days. Good luck and get well soon. -AJ

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