9 Problems You Can't Solve With Money

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No matter how limitless your budget and how strong your arm, there are certain times when throwing money at a problem simply won't help. So take a look at the list below and ask yourself: Are you facing a situation whose solution might require thought and effort, as opposed to more bankroll? (See also: Your Money Problems Are Your Own Fault)

1. A Failed Relationship

A lot of relationships founder on the shoals of money issues, but even those can't be healed by throwing money at them — what they need is mostly better communication plus a generous dollop of willingness to compromise. And if the relationship problems aren't related to money, throwing money at it won't help at all.

2. A Mid-Life Crisis

It's a cliche of the mid-life crisis for a 40-something man to buy a red convertible, but it's not a purchase that's going to solve existential angst. Of course there's nothing wrong with buying a red convertible if you want one, and can afford it. It just doesn't solve any problems. (Not even the practical transportation problems that could be solved with a more practical car, really.)

3. Getting in Shape

Buying a gym membership does not improve your fitness. Neither does buying a treadmill, stationary bike, or elliptical machine. Regularly including appropriate aerobic, resistance, and flexibility exercise among your daily activities gets you into shape. (See also: 5 Ways to Turn Your Walk Into a Real Workout)

4. Acquiring Skills and Talents

Getting good at something is largely a matter of practice, and money is no substitute. Of course you can spend money on books, on classes, on workshops, and on tools, and all those things may be of some help, but they're not going to give you skills if you don't put in the time to develop the expertise (and they're certainly not going to give you talent).

5. Becoming Enlightened or Even Just a Better Person

There are always hucksters pretending to be one sort of spiritual guide or another, willing to take your money and show you the true path. There are also people ready to suggest that donating money to worthy causes makes you a better person. You can be confident that neither of those things is true.

6. Natural Disasters

It's very reasonable to spend money in advance of a natural disaster, to make yourself more prepared. A well-supplied pantry can really help you through something like a blizzard or a flood or an earthquake. The right tools and right supplies can turn a disaster into an inconvenience — or even an adventure. Money can also help some after a disaster is over. But no amount of money will turn back a lava flow, or get a commercial jet to fly through a volcanic dust cloud. (See also: 5 Emergency Situations You Must Prepare For)

7. Being Blackmailed

You know giving in to a blackmailer's demands just lead to more demands, right? You've seen this movie.

8. Wanting the Impossible

I'd like to spend the next 2000 years learning to be the world's greatest musician, greatest swordsman, and most eloquent Esperanto speaker, and then travel through time to play, fence, and argue with everyone history suggests might have been better at those things than I. Throwing money at that problem will not solve it — nor will it produce world peace, end hunger (or death, or disease), let me travel faster than the speed of light, or meet friendly aliens from other worlds.

9. Being a Happy Person

Money can buy things that you want, and money can certainly solve some problems — and if those problems are making you unhappy, then in that sense money can buy happiness. But research shows that happiness comes from other things. Things like doing good work and having the respect of your peers — things you can't buy with money.

The Three Questions to Ask

So, when is throwing money at a problem the right choice? I tend to ask myself these three questions before I decide to throw money at a problem.

1. Is the Cost Bounded?

That is, can you know up front how much money you're talking about? Is it a one-time expense, or would you be taking on a new recurring monthly expense?

It's easy to make the necessary cost-benefit analysis of a single payment. You have the information you need to decide if the cost is worth it — and if you can afford it.

If you're looking at solving a problem by signing up for a new recurring monthly expense, you're potentially talking about a lot of money. You're also making the analysis a lot tougher.

None of which is to say that recurring monthly expenses are never the right answer. Everybody has recurring expenses, and they're a perfectly reasonable way to cover the basic costs of living. But when you're talking about throwing money at a problem, you're usually talking about something less basic (and less long-term) than, for example, solving the problem of being homeless by renting an apartment.

The "being a happy person" problem fails this test, because even if this or that purchase would make you happy for a moment, no purchase will make you happy forever. The "being blackmailed" problem fails it as well.

2. Will the Money Solve the Problem?

Arguably, this ought to be the first question. If money won't solve the problem, then there's no point in throwing it — or even spending it. But in my experience, this question is so often hard to answer, while the other is so often easy, I find it makes sense to start with the other. If you answer that one to your satisfaction, then you come to this one.

What makes it hard to answer is getting a clear understanding of the problem.

For example, your car has broken down and you can't get to work. That's a problem where throwing money at it — paying to have your car repaired — may be reasonable. But don't stop your analysis there. To come to the right decision, you need to be sure you're getting to the fundamental problem. In this case, the real problem is that you don't have reliable transportation.

That's important, because making a needed repair does not always turn a car into reliable transportation. If this is just the most urgent of a list of needed repairs, maybe you need a different solution — a new car, or a good bicycle, or a bus pass, or an apartment closer to where you work, or a job closer to where you live.

Most of the other problems listed above — terminal illness, failed relationship, midlife crisis — fail this question.

That result is often heartbreaking, but it doesn't change the fact that whole categories of problems — medical problems, personal problems, political problems, social problems — often cannot be solved with money.

Save your money for the problems money can solve. Solve those other kinds of problems (if they can be solved) on their own terms.

3. Is There a Good Chance You'll Get the Money Back?

This is really a secondary question, after evaluating the cost of solving a problem with money. If a problem is clearly solvable, and the solution is easily affordable, you're probably not even thinking about it in these terms. (If the problem is that you're out of flour, and there's a grocery store a few blocks away that will sell you nearly unlimited quantities for less than a dollar a pound, then buying a bag of flour doesn't really rise to the level of throwing money at a problem.)

The third question becomes important when the cost of solving a problem with money is so large as to be a major factor in your budget — or especially if it will significantly impact your wealth.

Probably the most common circumstance is when you've sent a check, but it has gone astray. If you're dealing with a reputable counterparty, especially one with which you have an ongoing business relationship, it's usually fine to just pay again. Eventually one of two things will happen. Your first check will probably turn up and whoever has gotten paid twice will refund the extra payment (or credit it to your next bill). Or, if it never turns up, the money will never have left your bank account. (This is a good reason to pay by check. If an electronic debit or money order goes astray, you'll have to involve your bank in tracking the money down.)

Another common situation where there's a good chance you'll get your money back is when you have insurance. If your house burns down, your insurance company will probably pay necessary temporary housing expenses. If you're sick, your health insurance will probably pay necessary medical expenses.

Many times while traveling on business, I threw money at a problem, confident that my employer would reimburse me for those expenses along with my other business travel expenses — a legitimate move, because the money was solving a problem for my employer as much as it was solving a problem for me.

So sometimes, throwing money at a problem is the right move. But asking yourself these three question beforehand is always the right move.

How do you decide if money is the answer to a problem? Please share in comments!