13. Money is a flow

Today, let’s widen the circle even further and include our neighbours, our community, our fellow citizens, the citizens of other countries, the Earth… we are all interconnected… which raises another question: what is money? Often we only look at the money we have… as if it was a bottle of water. We work to fill up our bottle and then we use it to water… our bills, our rent, food… and we complain our bottle is too small and empties too quickly.

Let’s look up and try to get a bigger picture: what if money was a river flowing from people to people?
Our employer fills up our bottle once a month or our customers fills them up each time they buy something from our business. We keep some for a while then pour it to our landlord (rent), the grocer, the electricity station, the doctor, etc… We also pour some in a tank – the bank – to use it later when we have to water a big plant (the school, the tax authorities, the appliance shop…). (More on banks in next lesson).

Why does it matter to look up and see the whole money flow? Because instead of only focusing on the things we get with our money, we can also think wider about the people to whom we redirect our share of the river and how it impacts them… Because that helps us take more informed decisions… isn’t that the purpose of money management?

Let’s look at the river!

Self-centred view of money (the “bottle”)	Broader picture (the “river” from people to people)	Action Points
I want the cheapest clothes.	Low prices likely to mean low salaries for the garment factory workers.	Shop responsibly: read the labels, enquire on brands and manufacturers. (see below)
I minimise my tax as much as I can.	Lower funding for public spending such as school, justice, police, roads, hospital and other infrastructures…	Fiscal responsibility: learn the law and pay the tax! Get informed: how does the Government use money? What do other political parties say?
I expect a 10% yearly increase in the value of my pension fund to be able to retire.	Where does this increase come from? Does it come from the company’s good financial results? From a loan? What is the impact of the company on its employees, communities and the environment? How will that impact the next generation?	Learn the basics of investment (see below). Inquire what your investments consist of, what companies or entities you invest in.
I keep all my savings at home	Keeping your flow out of the river… cannot help others… and it may “evaporate” (inflation)	List your goals, when you will need this money and invest accordingly (see below).

Responsible shopping: taking informed decisions is not easy because supply chains are increasingly complex and not very transparent: items like electronics or even food are often manufactured in several countries, for example, by people we don’t know and who live far away so we have no idea of the impact of our purchase choices on their living conditions, let alone on where the resources come from and how their extraction has impacted the Earth and the people living near the extraction places. Sometimes buying local can also help us better see the impact of our purchases on people. In any case, look further from the thing you are buying and get a bigger picture of the people who made it: inquire and choose… we vote with our wallet.

There is one topic which should be at the core of financial education… but is completely absent of most programmes: how to tackle corruption… when money flows into the wrong pockets. It may be prevalent in your country – avoid it as much as you can – it’s like watering weeds… be cautious and firm – don’t accept any and try to close the taps that water weeds around you – in your family, relatives and friends.

Let’s not be self-sighted… let’s not buy, save, invest or give blindly: let’s manage money in a responsible way. We are all interconnected: your expense is someone else’s income… and your income is someone’s expense. Let’s be mindful where we make money flow and ask questions and inquire!

To put into practice:

Look at what you spend: whom do you make the money flow to? Is that in line with your values?
Learn your tax responsibility and act accordingly.
Read your country’s budget.
Track any “bribe” (if any) that you were compelled to pay in a specific category to get an idea of the extent of corruption.