Money — or lack thereof — is a perpetual, tacit, omnipresent force in our mental lives, influencing not only our emotions and relationships but also our sense of self-worth. Our subconscious assumptions about money — often inherited, learned, and rarely examined — influence more of our daily decisions than anyone would care to admit. The way we think about earning, saving, and spending money quietly dominates much of our brain’s energy, influencing everything from what we shell out for restaurants or travel without uttering the word “expensive,” to the careers we pursue, the friends we keep, and our aspirations such as “owning” a home. Money is not merely a tool for exchange; it is a lens through which we interpret success, security, and even love. The peculiar thing is that most of us believe we understand money, but actually we are guided by myths, fears, fairytales, and collective delusions that are neither logical nor rational.
The story of money begins thousands of years before Apple Pay and Venmo. Early societies traded goods directly — cattle, grain, shells, even human labor — but as communities grew, the need for a universal medium became clear. The first physical money pieces, such as Mesopotamian clay tablets and Chinese shells, emerged around 3000 BCE; metal coins were invented in Lydia around 600 BCE, making trade easier. Paper money was born in Song dynasty China during the 11th century and became a symbol of trust between distant rulers. Across sundry epochs and cultures, forms and conceptions of money have varied wildly: for some, it is a sacred object imbued with the meaning of God or gods’ love; for others, it’s their personal identity; for others still, it’s a tool of trade; and for others — like my grandparents — it’s a means to freedom. The meaning of money is never fixed; it is always a reflection of the values, beliefs, and concerns of the people who use it.
Georg Simmel’s 1900 book The Philosophy of Money still offers one of the most insightful analyses of what money really means to any society. Simmel argued that money is not just a medium of exchange but a “structuring agent” that shapes our relationships, our sense of value, and even our conceptions of ourselves. Today Scott Galloway speaks about “forced scarcity”; in 1900, Georg Simmel stated that objects that are too easily obtainable lose value, while those that are too distant also lose their allure. Value, therefore, is found at a particular “distance” and money becomes the universal mediator that allows us to compare and exchange all goods and services.
Over the past 125 years, the philosophy of money has changed with our society: in America, money has come to symbolize not just wealth but identity, status, and even moral worth. Newspapers obsessively report movie box office revenues as if they magically correlate to the quality of a film; while billions of people struggle every day to survive, the net worths of billionaires get the headlines; and inexplicably we trust what rich people like Bill Gates and Mark Cuban say about anything more than we trust what other people say. The number of billionaires in the country is somehow regarded as a measure of national health. This existential fixation regarding money as a scorecard of success reveals just how deeply it has infiltrated our collective psyche.
Economics as a discipline emerged from the need to understand how societies allocate scarce resources but its scope has grown to encompass everything from global markets to individual behavior. Concepts such as gross domestic product (GDP) and the Dow Jones Industrial Average have become shorthand for national well-being and personal success, even though they are abstractions that often obscure more than they reveal. The Orwellian interest in GDP and the stock market as measures of progress has led us to prioritize growth over individual well-being. Economics has shaped how people perceive money, encouraging them to see it as a quantifiable, rational force when in reality it is deeply entwined with power and other intangible forces such as nepotism or perceived value (consider an Hermes Birkin bag). The discipline of economics has become a kind of secular religion, offering both comfort and confusion in equal measure.
Behavioral economists and psychologists have spent decades uncovering the strange and often irrational ways people think about money. The work of Daniel Kahneman and Amos Tversky, among others such as Richard Thaler, has revealed that our financial decisions are rarely as rational as we like to believe. For example, “Prospect theory” experiments reveal that people are more sensitive to losses than gains, so the pain of losing $100 is felt more intensely than the pleasure of gaining $100. “Mental accounting” shows that most people are willing to drive 20 minutes to save $5 on a $15 item but not $5 on a $125 item. The “Wage increase experiment” shows that workers given nominal wage increases (not adjusted for inflation) report higher satisfaction, even when their real wages do not change. “Price perception studies” demonstrate that consumers perceive products priced at $9.99 as significantly cheaper than those at $10.00. “Anchoring effects” demonstrate that people’s willingness to pay is skewed by arbitrary initial prices. These experiments reveal that our relationship with money is not just about numbers but about the stories we tell ourselves.
Depending on where you grew up, decisions about education and employment are deeply influenced by perceptions of money and status. Young people are encouraged to attend university not just for knowledge but for the promise of higher earnings. The choice of what to study is often driven by pragmatic concerns about future income rather than passion or curiosity. The psychological relationship with time and opportunity cost is central to these decisions: people weigh the years spent in education against the potential rewards, and the hours worked against the lifestyle they hope to achieve. Many are willing to sacrifice present happiness for future security, trading time for money in a calculation that wouldn’t add up for many other people. The paradox is that the pursuit of financial goals can lead to burnout and a sense of emptiness even as it promises material fulfillment. The way people choose to earn money reveals much about their values and fears; the question is not just how much we earn but what we are willing to do or give up to get it. Also, regarding employment, lower-class people think in terms of hourly wage, middle-class people think in terms of annual salary, and wealthy people think in terms of net worth.
Not everyone is a “Nepo baby,” but considering that 700 million humans live below the poverty level, if you’re reading this article you were probably born on third base (but are highly unlikely to ever admit it — you prefer to believe that you worked hard to attain your level of success). Wealth is not simply a matter of hard work or talent. Where you are born, who your parents are, and the opportunities available to people in your community play a decisive role in your financial trajectory. Warren Buffett calls many people, such as his own offspring, members of “the lucky sperm club.” Eliza Filby’s “Inheritocracy” demonstrates that privilege is often inherited rather than earned and that zip codes can be a stronger predictor of future wealth than intelligence or effort. This systemic advantage is rarely acknowledged, but it shapes the playing field in profound ways. Those born into wealth have access to better education, networks, and safety nets that allow them to take greater risks, while others face barriers that are difficult to overcome. The myth of meritocracy persists but evidence suggests that inherited advantage and the circumstances created by that advantage are far more important than most people care to admit. The psychological impact of the reality of inherited privilege is profound: it can lead to both complacency among and resentment.
As an aside, please allow me to note my own observations as a psychotherapist with 17 years of experience: from firsthand observations of couples of different heritages — say, Jewish and WASP — not only class but heritage also influences the way people think about and act with money. I’m just saying.
Debt has become a normal part of modern life, a rite of passage for homeownership, education, and even daily consumption. Mortgages, credit cards, and student loans are framed as investments in the future, but they also create a psychological burden that is sometimes underestimated. The pressure to repay can lead to constant background stress affecting everything from job choices to mental health. Studies show that individuals struggling with debt are more likely to suffer from depression and anxiety, experiencing physical symptoms like headaches and poor sleep. The normalization of debt is a cultural phenomenon, but its effects are deeply personal. People justify taking on debt with rationalizations about future expectations but the reality is that debt can create a sense of entrapment. It’s difficult to tell your boss “I quit!” when you have numerous bank notes on cars, houses, and loans due every month.
A healthy relationship with money begins with self-awareness and a willingness to question inherited beliefs. Recognizing our fears of scarcity, emotional triggers, and biases is the first step toward making more mindful financial decisions. Statistically, spending money on experiences, relationships, and personal growth tends to increase happiness more than purchasing material possessions. Practicing gratitude and forgiveness and setting realistic goals can help reduce anxiety and foster contentment. It is also important to face our finances head-on rather than avoiding bills or budgeting out of fear or shame. Money should serve our well-being, not dominate our mental life or dictate our self-worth. Ultimately, a healthy relationship with money is not about how much one has, but about the financial mindset one chooses to have.
Not all societies or subcultures revolve around conventional money. At Burning Man, for example, the ideal of a “gift economy” prevails: people exchange goods and services without money, which I found somewhat relieving when I attended in 2009. Alternative trading economies, such as time banks, challenge the idea that value must always be measured in dollars. Looking at alternative perspectives remind us that money is not the only way to organize human relationships and that other forms of value — such as time, care, and connection — are just as if not more meaningful.
I often ponder, “Why do some hardworking, intelligent people remain poor, while others who seem less deserving become rich?” The concept that we all have financial “karma” comes to mind. We like to believe that hard work prevails, but infinite other factors — some discussed above — such as having capital to invest, timing, contacts, etc. — suggest that other contingencies play a far greater role than we like to admit. Financial success is often the result of a complex mix of ingredients including social connections, chance encounters, timing market fluctuations, and governmental policies such as lower interest rates that make borrowing money easy. Why isn’t individual karma a part of that probability wave collapsing too? We need to question our assumptions about merit and deservingness. Perhaps money is not always a reflection of virtue or effort but of an intricate unseen web of causes and conditions that are beyond any individual’s control. The relationship between effort and reward is far less direct than we imagine. How different is making money off Crypto currency from betting in a casino? Sometimes the universe seems to have its own incomprehensible design when it comes to how some people earn, spend and save money.
Our relationships with money are not what we think they are. Beneath the surface of rational decision-making lies a tangled matrix of emotions, biases, and social conditioning. We justify our earning, spending, and saving with odd rationalizations, unaware of the subconscious and outside forces at work. Money functions like a mirror, reflecting our deepest fears and desires. It shapes our lives in ways we seldom recognize, affecting our happiness, our relationships, and even our sense of self. To truly understand our relationships with money, we must look beyond the numbers and into the stories, assumptions, philosophies, and psychology that define our financial mental lives and ask how logical and rational they are. Only then can we hope to forge healthier, more conscious relationships with this fascinating human invention.