It's common knowledge that people often lose their heads when it comes to money. Gambling, buying lottery tickets and credit card debt are a few examples of how irrational thinking can damage lives when it comes to finances.

I'm talking here about something a bit more insidious. Think of the following situation. When offered a raise or an opportunity to save money, quite often human beings run after the dollar bills without really understanding the trades-offs they engage. At times, people are even capable of sacrificing relationships or lifestyle choices that are of great value to them, all in the name of money that - ultimately - doesn't necessarily bring them what they want.

Consider the following example. When deciding what sort of career to choose, a young student chooses to become a lawyer because her parents tell her lawyers make good money. What doesn't enter into anyone's equation is that lawyers also work long hours, sitting at desks and often pouring over details. Does the young student factor in what type of lifestyle she would like? Does anyone consider that perhaps she doesn't need or want a large house, a big mortgage and two luxury cars?

Indeed, financial concerns are not to be trifled with. Money solves lots of problems and gives access to all sorts of benefits. Money MAY be as good a reason as any to make decisions.

BUT - it is very, very important to get clear in your mind what exactly the financial benefits a particular sacrifice will afford you. Money is a great thing, but it's actually better thought of as a lever. You can use money as leverage to procure you things, experiences or convenience, but you pursue it with reason at your own peril.

To be more specific, it's good to be clear about what a better financial situation will give you - a new house? A new car? The possibility to travel? A more secure lifestyle or retirement? A rental property to produce income into the sunset? All these things are non-negligible and worthwhile as additions to your life.

BUT - money often comes at a cost: longer hours, human sacrifice, more stress, more involvement, more responsibility, moving, spending less time with loved ones.

Thus, in the rush for more dollars, often emotional or lifestyle needs get neglected. The vital thing to keep in mind, then, is that managing money is a question of priorities. To cultivate the type of life you want, an unchecked pursuit of more dollars doesn't necessarily equal more happiness. In thinking of money as a lever - it's easier to conceptualize what, concretely, you're working for with that pay raise.