Your finances reflect more than just numbers on a spreadsheet—they embody your priorities, dreams, and beliefs. But how often do you step back and examine whether your financial decisions truly align with what you value most? In a world driven by consumerism and instant gratification, it's easy to lose sight of the bigger picture.
This article will guide you through the process of aligning your finances with your values, exploring key questions and strategies to ensure that your money works in harmony with the life you want to lead. Whether you're aiming for financial freedom, a minimalist lifestyle, or a focus on sustainability, this exploration will help you bridge the gap between your wallet and your values.
Identify Your Core Values
Your goals in life can help you identify your core values. Examples of some core values are independence, community, and security. What led you to your current path in life? What values do you admire in the people around you? Keep asking yourself “why” until you get down to a value that resonates. Try to limit your list to 3-5 values to start.
Many of my older clients’ value independence and family. Some other clients value learning and giving back. You will likely have a long list of values the first time around so it is important to winnow the list down until you feel like you cannot do without those values on the list.
Set Goals Based on Your Values
If someone looked at your budget, would they be able to discern some of your core values? Reflect on the values you have selected and decide if you are satisfying your values or not. If not, set specific, attainable, relevant goals. If your values include community and faith, you could set a goal to get more involved with your church.
Making donations of money or of your time to organizations that align with your values is one simple goal to set. Reflecting on your unique skills and how those could best be used to express your values is another way to brainstorm goals.
The clients I mentioned above who value independence and family might set a goal of planning a family reunion. The other clients who value learning and giving back may find fulfillment through volunteering to educate others. Whatever your core values, look for ways they can intersect and complement each other in the form of your goals.
Evaluate Your Current Financial Situation
Now look through your expenses, debt, and investments through the lens of your values and your new goals. If one of your core values is independence then perhaps reducing your debt load aligns with that value. If one of your goals is to retire early, then a next right step may be to evaluate your expenses to understand how you could possibly cut back in order to increase your retirement savings. Working with a Certified Financial Planner™ professional can help ensure you are making wise financial decisions.
If you already make charitable donations, regularly review your charities of choice through a tool like Charity Navigator to ensure your money is being used efficiently. Make this a regular habit especially if you have been giving to the same organizations for many years.
Pursue Your Value-Driven Goals
Next create a plan that outlines specific steps, such as reducing unnecessary expenses, updating your recurring donations, or reallocating investments to achieve your goals. Stay committed to your goals by tracking your progress regularly and don't be afraid to adjust your plan as circumstances change.
Read our articles on budgeting here: How-Tos of Successful Budgeting and here: What Budgeting Strategy is Right For You?
Surround yourself with supportive influences, like-minded communities, or mentors who share similar values, as they can provide encouragement and practical advice. Above all, remember that pursuing value-driven financial goals is a journey; it may take time and require flexibility, but the fulfillment that comes from aligning your finances with your beliefs will be worth the effort.
Seek Professional Advice
If you're struggling to align your finances with your values, consider seeking advice from a financial advisor or planner who specializes in value-based financial planning. They can offer personalized guidance and support. A professional may have ideas that you would not develop on your own. They may be able to connect you with organizations or communities to expand your impact.
By following these steps, you can create a financial plan that resonates with your deepest values, leading to a more fulfilling and purpose-driven life. Call an advisor at American Money Management today for help aligning your finances with your values.
