Rational Emotive Behavior Therapy (REBT) developed in a real-world clinical setting. Ellis based his therapy on timeless philosophical ideas. Because of its roots in philosophy, it applies to a broad range of human problems and dilemmas. The rational pursuit and use of money is the subject of this email. Due to space limitations, I will have to limit my treatment of this critical issue. I hope to show how one can adopt healthy and rational attitudes towards money, spending, salaries, saving, and investing.
Money is a Tool
It is useful to see money as a tool that you can use to pursue resources to preserve your life, comfort and perhaps set the stage for enjoyment and fulfillment in life. The first mistake with money to avoid is to use the amount of money you possess and earn as a measure of your human worth. Money is a measure of something but not of your human value. It is a measure of your skills in the market you compete in, including the vagaries of demand. Many variables, some beyond your control, influence the salary you receive for the job that you perform. If you earn your money by providing a service, you only have so much time to complete your service and earn income because time is not an elastic resource.
People who make money through products they create and are later manufactured by machines or who make money based on other people’s labor will receive income even when they are not working. In these situations, they will be capable of earning far more than the service performing individual. The barriers to entry of your business or industry will also impact how much you make. If there are low entry barriers, more people can enter the marketplace and put price pressure on your service. As barriers to entry to the industry increase and reduce the number of competitors, your service or skillset becomes more valuable. The point to keep in mind is that what you earn is not a reflection of your human worth and maybe a distorted reflection of your skill’s actual value. People will disturb themselves because they are not earning what they believe they absolutely should make. They then rate themselves as lesser people based on their hourly wage or yearly salary. This flawed reasoning adds insult to injury as the individual is still unfairly compensated and creates for themselves self-defeating emotional disturbance about their unfair compensation.
Money Does Not Measure Human Value
Rational Emotive Behavior Therapy has two suggestions in this regard. First, see that it is both self-defeating and invalid to use one’s salary to measure human worth. There are other potential definitions of human worth. Given that there are multiple possible definitions of human value, it suggests no absolute measure of human value exists. Therefore, the worth of a human cannot be validly or objectively measured. Humans are evolving beings and highly complex. Any particular skill does not represent the whole human. The monetary value of the skill also is not a measure of the entire human. What a person earns reflects their skill, ability to market their skill, the current competition, and other market conditions. Human value is unmeasurable, while salary is a measure of what the market will pay for a particular skill set or service.
In a utopian world, fair compensation would occur in all cases. Unfortunately, we do not live in a utopian world, and due to a range of factors, salaries sometimes are unfairly distributed among workers. Misguided laws, bias against individuals and groups, self-serving organizational policies like salary parity, and other factors mean that some people do not receive their rightful due.
Do Not Confuse What You Want with An Absolute Need
Another area of irrationality when it comes to money matters is the need to use it to obtain prized material goods. It is healthy to want things. Humans all have their wants and desires. You may want a better mobile phone or a fashionable item of clothing but see that you will misspend your money if you confuse what you want with what you unconditionally must-have. It is pleasurable to have a new phone but is it worth carrying debt on your credit card to have that shiny new phone? Is it not the case that the old phone works well? Once you think you absolutely need some possession, you will likely conclude that it is unbearable to be deprived of this possession. You may also wrongly conclude that obtaining the possession will make you a better person. These attitudes underpin the psychology of status symbols, whether they are cars, clothes, phones, or homes. People think they absolutely need what they want and then jump to illogical conclusions that deprivation is unbearable or that possession of these things makes them better than other people, a good enough person, or an acceptable person.
REBT advocates the philosophy of long-term hedonism. Long-term hedonism means to strive to delay gratification or even refraining from gratification entirely when doing so will enable greater pleasure in the long run. Judging from credit card balances, many people buy things they cannot afford. They live beyond their means in a short-term pleasure-seeking manner. They buy on credit without reflecting on the long-term consequences of this indulgent habit. Not all purchases on credit are self-defeating. Buying a house on a mortgage can be a good investment. REBT is against extreme thinking, and do not think that I am encouraging you not to use credit. What I am encouraging is the egoless use of credit. Use credit based on sound reasoning, expectations, and assessment of the utility of the purchase. See that just because you desire that phone, car, item of clothing, or even that bigger home, it is only a desire, not an absolute necessity. Defining what you want in terms of an absolute necessity will lead to using money and credit in a self-harming way.
Couples sometimes argue over money. People avoid such arguments when they take their egos out of their purchases and purchase things based on what they can afford, not based on falsely defining what they want as an absolute need and using credit to make their purchase. When you find yourself having arguments over money with your partner, introduce them to REBT’s reasoning on these matters and show them how their indulgence in pleasure today undermines greater satisfaction in the long term. Worse yet, indulgence in purchased pleasure today can create pain and financial discomfort or even ruin in the long run.
Here are some helpful attitudes you can use towards money:
- It is uncomfortable to live below my means and save and grow my money through prudent investments, but it is not unbearable. I can bear the discomfort of not spending all my earnings today or living beyond my means. Living below my means and investing is worth doing because I will grow my money and have greater pleasure in the future.
- My wealth is not a reflection of my human worth. I am too complicated to be represented by how much money I possess or what salary I earn. Money is an important thing to obtain as it is a tool, but it is not a valid measure of a human’s value. Human value can not be appraised in a valid way. I will either assume all humans have equal value because they are alive, or I will more precisely see that human actions have value, but the value of the human can not be summated based on their actions. Either philosophical position will lead to emotional health. In either case, wealth and compensation never are a valid measure of a person’s worth as a human.
- When I invest my money, I am taking a calculated risk. If I think I must grow my money quickly, I am likely to make foolhardy investments. Instead, I will distribute my risk across different assets to minimize the potential of significant financial hardship in the future, even if this more balanced approach to investing leads to more modest gains. Slow and steady wins the race.
- I want what I want, but I never absolutely need it. It is nice to have the latest and greatest gadgets and clothes but bear in mind that there is a cost associated with any purchase. I will make more prudent purchases if I do not mislabel what I want, desire, and would like to possess for an absolute necessity. I never absolutely have to have what I want.
- I do not have to have what others have. If I live my life to keep pace with what others have, I will likely live beyond my means. I will be happy that others have what they have without thinking they are better than me for having the means to obtain those possessions. I will not down myself, rate myself because I do not have the means to get what others have. Money is not an objective measure of human value regardless of how many people think this to be the case. At one time in human history, most people thought the world was flat. The few who disagreed with the majority view, in the end, turned out to hold the correct view of the world. Think for yourself when it comes to money.
- It is nice to have new clothes, cars, phones, and other toys, and so I will save my money and then make these purchases. It is uncomfortable to hold off and wait to buy something, but it is worth it. A sale price is not a genuine bargain unless I currently possess the money to purchase the item on sale. There will be other sales if I do not have the money to buy this item right now. Debt often is a self-defeating burden brought on by indulgence and ego-driven purchases.
- When unexpected bills come in, I will remind myself that this is why I save money. I will not disturb myself by thinking that unexpected bills must not happen. Life is full of unforeseen events, and this is why I have saved money. Money is not an end in itself to accumulate. I will save it and then spend it when troubles come my way.
- Like all tools, money has its limitations. You might not be able to buy love with money. Virtuous character traits still impact people and relationships. Accumulate money for rational reasons but also cultivate your character to maximize pleasure and meaning in life.
Note: On Saturdays, I hold a free Zoom conversation hour where I take a volunteer and discuss one of their problems. If you have been avoiding working towards a goal or dealing with a personal issue, perhaps you would like to volunteer and discuss your situation with me. I will show you the rigid and extreme attitudes that are holding you back from achieving your goals.
Saturday Rational Emotive Behavioral Zoom Conversation hour 9 AM Eastern, 2 PM GMT, 2 PM UTC:
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https://rebtdoctor.com/rational-emotive-behavioral-weekly-zoom-conversation-hour.html
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