What are your financial values? This is a question that few people ask themselves, but it is an important one. Your financial values are the guiding principles that dictate how you manage your money. They shape your spending habits, your saving strategies, and even your investment choices. If you have not taken the time to discover your financial values, now is the time to do so! In this blog post, we will discuss what financial values are and how to discover them for yourself. We will also provide some tips on how to put them into practice in your life!
The principles that guide your relationship with money. Just like any other set of values, they are unique to everyone. They about what is important to you when it comes to your finances? Are you looking to save as much money as possible? Or are you more concerned with making sure that your spending aligns with your personal values? You are focused on growing your wealth so that you can achieve your long-term financial goals?
What Are Personal Values?
Most people think of personal values as abstract concepts that do not really have anything to do with their day-to-day lives or finances. Your personal values are the foundation of who you are and what you stand for. They guide your decisions and affect every aspect of your life, from your relationships to the way you parent your children, to your career.
That is why it is so important to take the time to discover your own personal values and understand how they influence your financial decisions. Here are a few ways to get started:
-Think about what is important to you in life. What do you care about most? What are your passions? What makes you happy?
-Consider your beliefs and principles. What do you believe in most strongly? What are your core values?
-Look at how you have lived your life so far. What are the things that have been most important to you? What decisions have you made based on your personal values?
-Talk to your friends and family. What do they think are your most important values? What do they see as your strengths?
Once you have taken some time to reflect on your personal values, it is important to start putting them into action and make sure your financial goals are in alignment with those values. If you do this, you can have a successful and satisfying financial life.
Let us look at some financial circumstances and use this time to reflect on each of them.
You only have 5-10 years to live
How would you spend your money and manage your finances? Would you buy an RV and drive around the country with you family or significant other? Or would you try to save as much money as possible for your children's education or future?
What is Important to You That is Not Financial?
Maybe your dream is open a domestic violence shelter for women because you have personal experienced it or had family/friends who were exposed to domestic violence. Or you exercise and eat healthy religiously because your family has history of loved ones passing away at young ages from health issues that could have been prevented or managed if your relatives lived a healthier lifestyle.
Your most important non-financial goals will help determine what financial values are important to you. Not sure how? Let us look at the domestic violence shelter. You may be planning you put a down payment on a building and then get funding from other sources to maintain it. Therefore, your focus will be on saving towards that down payment and not spending on things that are not important because you are so passionate about this goal.
Your Income Suddenly Dropped 20%
I know none of us want to think about our income decreasing. For the sake of discovering what may be most important to you, answer these questions. how would you change the way you live? What activities would you still do, and which ones would you have to give up? How would you spend your free time? Which luxuries would you stop buying? Would your saving and investing habits change?
Some people may find the home they are living is unnecessary and will downsize or move to another neighborhood or change the amount of entertainment they have outside the house with friends to cut back on the amount of money they are spending. While someone else may stop working with their personal trainer and start saving more because they realized they did not have enough savings in reserve in case of an event like this happening.
Your income increased by 50%
What would you do? You might add new things to your life, like new activities or services. You might also drop some activities to make room for the new things. Or you may not change anything except increase the amount you save every month and invest towards your future.
The changes you would make with more money can tell you a lot about your financial values. If you got more money, would you spend most of it, or save it? Would you be able to afford something that is important to you like donating more of your time or money to a charity or non-profit? You might have always wanted a house cleaner (maid) because you dislike cleaning and would rather use your time on activities you enjoy.
Think About Your Retirement
How do you want to live? Where do you want to live? How important is your retirement compared to now? Would you rather have a good life now or in the future?
It is important to know the answer to this question. Knowing the way, you want your retirement to look like will help you focus your finances on building and investing for your future. If you are looking forward to travelling more than your savings needs to be able to support that lifestyle. Some people retire and their income bracket decreases, and they are now living in poverty. The poverty rates in older people have increased by 16% and unfortunately if you live in America Social Security payments may no longer be an income supplement.
Would you be willing to Trade more time for income?
If you made $50,000 a year, would you be willing to trade 20% of your free time for an extra $10,000? How about all your vacation time for the year? How many weekends would you be willing to trade for an extra 20% of your income?
There is this desire to make more money at your job so you may say all the time that you would like to have a supervisor or Management position to earn more money. Think about how many hours they work a week outside of the 40 hours you may work. Is your time with your family more important? Even though we all need to learn how to work smarter and not work as hard for more income some things take time to build before you can start reducing the amount of time you need to maintain it. Are you willing to give up 20% of your time now to get back 30% later?
No matter what your financial values are, it is important to identify them and live by them. When you have a clear understanding of what is important to you, it becomes much easier to make sound financial decisions. Here are a few tips for putting your financial values into practice:
–Create a budget that aligns with your values. When you are living within your means, it is much easier to stay true to your financial values.
–Invest in products and services that reflect your values. If you believe in environmental sustainability, for example, invest in green energy providers or sustainable mutual funds.
–Avoid impulse purchases. If you are working towards saving money, do not let your emotions dictate your spending decisions. Take the time to think about whether a purchase aligns with your financial values before you make it.
Have you thought about what are your financial values? How do you want to feel when it comes to money and wealth? What kind of life do you want to live, and how can your finances support that vision? It is time to think about these things because they will have a significant impact on the decisions you make going forward. Once you know where you stand, I can help get you there. I offer a variety of services to fit every budget and goal, so do not hesitate to contact me for more information!