In my humble opinion, money has lost a lot of value in this country over the last handful of decades.  I’m not simply referring to inflation, but rather the way we collectively view and treat our legal tender.

Barring a windfall or inheritance, dollars once had to be earned before they could be converted into tangible goods.  The roof over your head, the food in the pantry, and the clothes on your back were the product of your work.  Unless you provided a value to society through your efforts, your income would be scare beyond government aid.  There are other variables in the equation, but the correlation between one’s contribution and their ability to thrive was a strong one.

To acquire more assets and improve your quality of life, one needed to find a way to increase their stream of income.  For example, if your current 1,700 square-foot home already stretched the budget thin, you could forget about upgrading to a 2,400 square-foot house out in suburbia, unless of course you came up with the means to pay for it.  A higher income alone wouldn’t cut it.  The bank, in requiring a sizable down-payment on the house, protected their interests by providing funds only to those who demonstrated they were financially disciplined and stable. 

The financial system was far from perfect back in those days, but at least money was treated with a cautious respect.

Nowadays we have financial opportunities that our previous generations could only have dreamed of.  Internet banking and research, automated bill-pay and saving, IRAs/401k’s, mutual and index funds; the list goes on and on.  Our financial system has undergone an enormous amount of innovation as we’ve moved into the information age, yet we’ve collectively failed thus far to truly utilize the amazing opportunities and build a prosperous future.  Instead we have constructed our lives on completely unstable and unsustainable financial grounds. 

If we were to write an equation for the collective state of this nation’s citizens finances, it would look something like this; virtually no savings + mountains of debt + paycheck to paycheck living+ keeping up with the Joneses = an utter mess.  It’s incredibly stupid, yet so many live their lives that way.  I wonder what those who lived during the Great Depression would think…

In addition to the newer financial tools listed above that offer enormous benefits, we also have more fireworks at our disposal; credit cards being case number one.  Used wisely, they can be a great weapon to have in our arsenal , yet most Americans have only managed to shoot themselves in the foot with plastic.  The temptation for instant gratification causes many to forget all common sense when they are wielding magic plastic.

I seriously hope that our nation will emerge from this self-inflicted mess with a much healthier respect for money.  In the meantime, we are still learning the painful lessons that come from putting material wants ahead of our basic financial health.  We weren’t much better than the drug addict who sacrifices his physical and mental well-being for temporary escapes.  We refused to acknowledge the long-term consequences of our actions, driven by the short-lived highs that come from putting far too much emphasis on ‘things’, which was mostly crap we didn’t even need. 

Maybe, just maybe, we can outgrow such foolishness and truly prosper…

I’ve just come across some info that suggests we are potentially on the right track as a nation, so I’ll post about that promising piece of news next time. 

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