With clarity on your top values it is SO much easier to align money and overall life. You’ll be more fulfilled and have an easier time making decisions. Values are the core beliefs that motivate your actions and decisions. With well defined values and priorities, the numbers become secondary as living into your values becomes primary.
Define your Values
To define your values try the exercise below:
- Take 5 minutes to review the list I’ve included in the Values Inventory exercise. Go through and highlight all the ones that appeal to you.
- Set a timer for 3 minutes and select the top ten.
- Finally, set a timer for 1 minute and select your top five.
The top five may change over time as your life changes. For example, one of my values is adventure! For me, this is travel. But in these times of pandemic, it’s become creating new tools for All the Colors. It’s unlikely that every line item on your spending plan will meet one of these five values, however you’d be surprised at how many do fit.
I was introduced to this exercise at a “Money and Values” workshop hosted by Dimensional Fund Advisors. We had a GREAT conversation afterwards! For those of you that are partnered, I highly recommend you print out these sheets and go through the exercise together. You’ll learn so much about each other!
Values are a Decision Filter
When you compare your values to your use of time and money, you’ll see what areas are being nourished and which are being neglected. Is family one of your values, but you hardly spend time with them? Are you happy to see that you live into your value of achievement through your educational pursuits?
It’s unlikely that every line item on your spending plan will meet one of these five values, however you’d be surprised at how many do fit.
Bari Tessler, one of my money heroes, recommends you rename categories to reflect your values. This will make you smile when you’re reviewing your spending plan! See the examples below:
- Mortgage –> Home sweet home
- Paying down student loans –> How I became a kick-ass doctor
- Groceries–> Nourishment
- Miscellaneous –> Fun/Play
- Social Justice Investing –> Building Society Up, 7 Generations Out
Add your values to the heading of your spending plan to highlight what you’re living into and use these values as a decision filter.
For example, say you and your honey are buying a new car. You value simplicity, social justice, and freedom. Here you could look at different car and financing options. Maybe you go for a hybrid because it’s more environmentally friendly, and skip a few of the extras because it’s simpler to keep debt low.
Having your values top of mind can help with career choices, where you live, and really, most decisions.
How to Embody Your Values
Check in with your body when making a decision and consider which options best reflect your values. Is the impulse buy honoring your values? It may very well be, but it’s clearer and more joyful when you pause to check in.
This is not about judging yourself for every decision and predetermining the answer is “no”. This is a way to feel freer. You might say, “buying that pair of shoes is an investment in my career because I feel like a boss when I wear them – it reflects my value of individuality.” Your bones will say whether that’s true or not.
With clear values it’s easier to spot what no longer serves you and what you need to do more of.
Say you recently had a raise and have noticed lifestyle creep around random things. You’re spending more, it feels fine financially, yet you’re questioning whether it’s how you want to spend that raise – in fact, sometimes you question what it was even spent on? This is lifestyle creep.
On a separate note, to avoid lifestyle creep understand how your spending plan is divided between savings, necessities and present needs AND how it’s connected to your values. Check out my earlier article on True North with Cash Flow for an outline of a spending plan.
Values make Talking about Money Easier
The numbers are secondary when you have clarity on your values and priorities. It’s okay (even expected!) for you, your partner and family to have different values. Open the conversation by stating how you feel about the money decision at hand, outline what you want, and let go of the exact outcome.
Compromise is part of money decisions, regardless of whether you manage your own finances or share them with someone else. When everyone involved knows that their values are honored, the compromise on numbers is much easier .
Take a close look at what values you may have been handed by family or society and consider whether they serve you. As a Latina I often heard Dios dira…, or God will decide. This value of faith is wonderful, however with some family I saw it become denial.
I have tons of faith in my higher power, but I also do what I can to be a good steward of the gifts I’ve been given by saving for my future. Financial empowerment is a gift for my own well-being and that of my community. Because when my needs are cared for I can turn around and help others.
When you know your values, living into them is that much easier! It’ll help, from the daily decisions on whether to buy free range eggs, to considering whether private school is the best choice for your children and your community.