Money Grew on Trees

If Money Really Grew on Trees: A Budgeting Lesson

Easy Money? No. Easy Management? Yes.

Wouldn’t it be great if money didn’t exist at all? I’ve heard this many times and, to be honest, thought it myself when I was younger. We say this as if such as solution would solve all of our problems regarding class, want, and need, right? If only we didn’t have money, life would be fair and less stressful.

While this line of thinking appears to be the exact opposite of our wish for money to grow on trees (to be ubiquitous), the two actually have much in common.

I think we have these sorts of thoughts most often when money is causing us the most grief. It becomes easy to blame our money problems on the money itself. The problem is that those of us who think this way misunderstand the source of money’s value. We think that a dollar bill’s value is in the one hundred pennies it is worth. We believe the value of a twenty-dollar bill is the pizza we can buy with it.

The true value of money is in the exchange we make, not to spend it but to earn it. Such an exchange can involve effort, ideas, or anything we have that another might desire.

Not convinced? Let’s look at the wish for money to grow on trees to illustrate my point. When I visit elementary school classes (which I absolutely love to do) and introduce them to money and finances (earning, spending, saving, etc.), one of the questions I ask is if they would like it if money were to grow on trees. Adults tend to give the same answer because most of us have never thought much about it. We simply say, “yes,” and assume it’s a no-brainer. But what if money really did grow on trees? We’d all be better off, right?

We, if money were to grow on trees (as leaves actually do), here’s what I would tell you if you offered me $1,000 just to mow your lawn. “Why would I want your money when I can pull a thousand dollars off a tree any time I want?”

Changing how we think about money.

Placing the definition of what we DO with money rather than how we earn it devalues it in our minds. If we were to always remember that we value money because of what we traded to “get it” (i.e., our time, our energy, our labor, our ideas, etc.), we would likely spend a lot less of it frivolously.

If we figure out that we earn fifteen dollars net per hour at work, and come Saturday morning, we see something on sale somewhere for $150 (half the normal price of $300), we could use the spending-centric point of view to justify the purchase, saying, “Half off is a great deal! After all, I’m saving $150!”

If, on the other hand, we look at the purchase from an earning-centric point of view, we would instead have the following internal conversation, “I had to spend ten hours at work to earn that $150. Is it really worth all the effort I put into working those ten hours?” The thing may or not still be worth it, but at least the cost becomes much more personal.

This way of looking at money also has a huge impact on the way we see things such as the lottery, inheritances, and marrying for money. Where there is no effort, there is no perceived value, no appreciation, and no responsibility. Would this explain why such a high percentage of children who receive regular financial gifts from their affluent parents end up having dramatically lower net worth compared to those who receive no such gifts? Or those who win $50,000 to $150,000 in state lotteries and end up filing bankruptcy at the same rate as those who win less than $10,000? Even multimillion-dollar lottery winners can slip into the financial abyss.

Not dissimilarly, the rate of personal bankruptcies and financial stress among retired NFL players is an astounding 78 percent. Many of these individuals who played their way to multimillion-dollar contracts could overnight afford to live the high life (and often did), and then when the knee gave out or the ankle didn’t heal, found it virtually impossible to adjust to living on less, or at the very least, change their way of viewing money and investments. I’m not suggesting that they didn’t work hard. I know my measly two weeks of two-a-day high school football practices in 110-degree heat didn’t compare to what professionals go through, and those just about killed me. But it’s no difficult argument to make that many of our professional athletes and celebrities are overpaid in relation to the effort and time put into developing their profession. The same could be said about young, overnight, millionaire entrepreneurs. Not all of these usually young and exorbitantly paid individuals lack appreciation for their income. Many do appreciate their wealth, and those who do, tend to be less visible to us since they often shun the lavish lifestyles, expensive cars, and top-of-the-line, must-have, currently trendy clothing.

At this point, some are probably asking, “Why such an emphasis, Todd, on the vice of easy money?” The easy answer, in the immortal words of parents worldwide: “because!”

I know that I’m making it sound like having loads of money is a curse, and many of us would quickly say, “May I be cursed with such a curse! In fact, make it a double!” It’s not the money that is the problem, or even the actual method of obtaining it. It’s the likelihood that those who seek easy money tend to be those who least appreciate its value.

Seriously.

Because easy money does not solve our problems. If we don’t properly value our meager or modest incomes right now, we likely don’t manage it responsibly, and throwing more money at the problem will never fix it. Take the federal government as a case study there.

Managing money can be boring and that’s okay!

So I’m finally getting around to the issue of making money management a less stressful part of your life. You want to make managing your money easier, because, after all, you typically put a lot of sweat, effort, and time into earning it. Too many financial experts, however, propose elaborate systems for managing money. After all, aren’t financial experts right when they say, “The more time you spend with your money, the more details you can understand and control about your finances, the better off you’ll be”? It’s a pretty common sentiment. I may have even said such things years and years ago. But I was wrong to say them. I apologize. I’m sorry. Please forgive me. It is now very much my solid belief that you should make money management tasks boring, predictable, simple, and foolproof.

Here’s what I’m proposing, make money management easy. I’ll show you how to eliminate decisions related to many of your daily, weekly, monthly, annual, and even periodic financial purchases, along with the stress that tends to accompany them. By keeping the true value of your money in mind, you will actually tend to automatically spend less, collect less debt, and save and invest more. By eliminating as many decisions about money as you can, its management becomes easier, even routine. And when it comes to managing money, I’m all for boring.

About the Author

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  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

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Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
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  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

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The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).