Is $1 a lot of money?
Today I decided to talk about what money is worth and how we all perceive it differently.
Is $1 a lot? What about $1000? A million?
If you ask different people, you will probably get different answers. My 16-year-old sister probably has a different perception of $1000 dollar than I personally do right now. The people I met in Haiti in 2009 before the earthquakes struck probably value a dollar a lot more than I do. We’ve probably all been told by our parents at some point in our lives a line similar to this:
“One day, you will learn the true value of money”.
That was certainly the case for me when I was younger. And I assumed I had learned what money was worth over the years. However, I recently realized that this perception changes fairly often and I’m assuming it does for most people.
Money Perception Over a Lifetime
This is a timeline of how it happened for me in my very fortunate and privileged upbringing.
There is that phase as a kid when you get $10 for your birthday and you walk in the Toys R Us or the dollar store like a big baller thinking you can buy everything you want. Cool feeling. At that stage, every dollar counts. Pennies for candy, a few dollars for the toy machine at the store, you’re willing to take it all.
Then you start growing up and the gifts keep getting bigger. You might even get a weekly allowance. If you want, you can save up enough over a year to buy something worthwhile. A IPod or a video game console perhaps. Welcome to the big leagues pal. During that stage, $20 increments are a lot cooler than a few bucks here and there.
Next, you can think about getting a job. Maybe a summer job or a part-time job during school. That was my “I made it” moment as a teenager. I started working for my mom’s office for $10 an hour over the summer in high school. Then I started working for the city in the maintenance department. Big status job for a teenager. $12 an hour. Finally, the big step up. During my university years, I became a merchandiser for Frito-Lay (Ruffles, Lays, Doritos, Tostitos, etc.) placing their chips in stores all across town. $13 an hour. Things were getting serious. Honestly, that’s where things can take a turn for the good or the bad. You have the power to either spend a lot of money on a lot of stupid things or get ahead in life and save a substantial amount of money. 17 to 23-year-old me decided he didn’t need to save. The first few paychecks were eye-opening. However, the hundred dollar bills disappeared just as fast as they appeared. What can I say? Domino’s pizza is good, I had a lot of fun in Europe and my $15 mojitos were excellent. At that point, I lost track of what money was worth. I knew I had enough to do what I wanted without thinking further or wanting more of it. I also didn’t mind debt.
Ensuing, there is the HOLY SHIT phase. That’s when you start getting paid the big bucks. For me that was a week after graduating university in early 2017. I had a teaching job lined up for the rest of the school year and it was pretty sweet. Getting paid $40 an hour to teach was a lot cooler than $13 an hour to place chips at Walmart. Luckily for me, it was also at the exact time I got started with financial independence. I was also a few months off from having only $1 in my bank account. Not only was I receiving big paychecks to pay down my debt, I wanted my finances to get back to green so bad that just as when I was a kid, I highly valued every dollar I could get my hands on. The more the better, no matter what. Without this scarcity mindset, I probably would have followed a good friend of mine in buying a sweet 2017 Dodge Ram.
Around the same time, I decided to pursue a master’s degree in the US. I was lucky enough to receive a great scholarship along with a part-time teaching gig. A lot of monetary value and amazing perks, but a very tiny paycheck. Therefore, I knew I wanted to save a lot of money while I had this high-paying teaching job. On the side, I used every trick in the book to make a quick buck.
In the summer of 2017, just before making the big move, I told a good IRL friend and mentor of mine, who is well on his way to be financially independent, that I was taking surveys online to make some extra money. He started laughing when I told him for how much and this is what he told me when he saw my confused look: “My friend, very soon you will understand why I’m laughing”.
Fast-forward to today, I understand perfectly. I recently became debt free and my net worth is now a few thousand dollars in the green. My perception of what a dollar is worth and what it takes to get it has changed.
Do I care as much now about taking surveys online for extra money? Nope.
Do I get mad if I forget to activate my Ebates portal for 2% off a $20 purchase? Hell no.
Do I track my money to make sure significant chunks of it go into my investment account? Absolutely.
Am I still excited when I see my portfolio go up $25? Not as much.
All this to say that perception of money changes a lot. Right now, as I’m seeing the power of saving and investing, and the returns it yields, my $10 an hour side hustle at school doesn’t seem so relevant. I’m questioning it. Is my time now worth the effort for an extra $50-60 per week? It probably still is. But the motivation to get it is not the same as it was a year ago.
As you can see, I went through different money phases in my life. From seeing what I could buy as a kid with a few dollars, to earning a salary as a teenager and not giving a crap what I could do with it, to obsessively saving every dollar to reduce debt and finally to a level where one dollar is not as important as it was a few months ago.
My final take is that if you can get in a position where an extra dollar doesn’t really matter to you, you are one of the lucky ones in this world and doing well.
When I get greedy money-wise and start comparing myself to others who have more, I think back to January 2017 when I had $1.15 to my name. Or I think about my friends in Haiti and Nicaragua who have absolutely nothing. How is that for perception change.
What about you dear readers? Has your perception of what money is worth change over time? Is it still evolving today?