If one of your New Year’s resolutions is to monitor your spending habits, it might be helpful to understand that there are four basic ways to spend money. This analogy was put together by MiltonFriedman (1912-2006) of the Chicago School of Economics.
Christmas shopping puts us in many different situations when we buy gifts. In gifting you probably spent your own money and have to consider price, quality, and purpose. Has your boss ever given you authority to buy gifts for clients or other associates and charge it to the company? Let’s take a look at what money is, how it is spend and the power which comes with money.
“Think what you do when you run in debt; you give to another power over your liberty.”~ Benjamin Franklin
What is money?
Money is a current medium of exchange in the form of coins and banknotes.
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.
Money was created as an exchange for real value back-ups. Unfortunately, today we often use money which we don’t have (buy on credit). This has put many individuals in trouble including the government. In the old days when people who ran out of credit, they often put themselves into slavery.
How is money spent?
According to Milton Friedman there are 4 ways to spend money:
1) Spend your own money on yourself.
2) Spend your own money on somebody else.
3) Spend somebody else’s money on yourself.
4) Spend somebody else’s money on somebody else.
Mr. Friedman explains it best in this short video:
Money is an Energy Form
Everything is energy. All forms of energy are bound to the laws of creation. With this in mind, we have to be aware of how we make money, spend money and invest it.
Just making money for our own benefit, not caring where it came from and how it affects others, will not bring us fulfillment in the long run. While energy flow is closely related to the money flow, money itself will not bring us wellness, fulfilling relationships, and other exciting experiences. By circulating money, contributing to social causes and promoting peace, we will enjoy happiness and health ourselves. Considering that money is energy, there must be an abundance of it.
I hope that we can all experience the New Year with many blessings of good fortune.