How to Start Aligning Your Money Life with Your Values

Danielle Gates |

Are you putting your money where your values are? We all have the power to express and support our personal values in our money lives; specifically, in the ways that we earn, spend, give, and invest. Having money does not matter so much on its own, although a lot of us believe that it does when we focus solely on our account balances and investment returns. This type of thinking can lead to that feeling of being in a hamster wheel, getting tired but not really going anywhere. Instead, we should see and use money as a tool to reach our specific goals and visions for ourselves, and measure our effectiveness in this along the way, to really get the most out of our lives.

Values-based financial planning is a way to gain a more clear and focused money life. By identifying our personal values, financial decision making will become simpler and allow us to make more intentional choices with our money. Best of all, by honoring our values with our money, we can lead more fulfilled and joyous lives and rid ourselves from that dreaded hamster-wheel feeling.

The initial steps in aligning your money life with your values involve getting clear about what is most important, and then implementing strategies first within the categories of spending and investing.

Discover Your Values

What is most important to you? The values that you identify will determine the direction in which you point your sails to add purpose to your money life. To help with this, take some time to consider the three questions developed by George Kinder, CFP® from the Kinder Institute of Life Planning. Admittedly, these questions can seem a little “out there” but they are excellent at helping you get connected with your values on a deeper level.

Question One: Imagine that you are financially secure and that you have all the money you need for the rest of your life to take care of your needs. How would you live your life? Would you make any changes? These are your dreams, so do not hold back in your answer.

Question Two: Imagine that you visit your doctor who tells you that you have only five to 10 years left to live. Luckily, you will never feel sick. You will also never know when your last day will be. How will you spend your remaining years?

Question Three: Now imagine that this time, your doctor shocks you with the news that you have only one day left to live. Reflecting on your life, on all your accomplishments as well as on all of the things that will remain undone, ask yourself: What did I miss? Who did I not get to be? What did I not get to do?

Taking the time to articulate your values and meaningful goals can be a life clarifying experience and can help you feel much more connected and focused in your money life. Once you have your values and meaningful goals laid out, you can begin using them to influence your spending and investing decisions.

Align Your Spending

One of the easiest ways to put your money where your values are is to really be conscious about your spending. Is your money going where you want it to go? Take a look at your recent financial statements to find out. Create a values-based budget by prioritizing what is most important to you and cutting back on things that are not. If one of your core values is health, you may honor that by choosing to spend money on nutritious foods and fitness activities that you enjoy while avoiding expenditures leading to unhealthy habits like fast food. Or, maybe you discovered that you feel happiest when you are spending time outdoors. You may feel more fulfilled by reducing your movie and TV budget and using your savings to rent a community garden plot instead. It is important to notice that you do not need to spend more money to get more value from your purchases. By being mindful and focusing your financial energy on the things that bring you the most joy, your money will begin to work for you and not against you, in working toward your goals and feeling fulfilled in your financial life.

Align Your Investments

The more you share about your values and goals with your financial advisor, the more likely they are to understand the life you want to live. In terms of your investments, your advisor will look at factors like your risk tolerance and asset allocation to get you on track to prioritize your goals. Additionally, you may be interested in the values embedded in the specific investments that make up your portfolio. For example, if you drive a certain brand of car because you value the environment and want to avoid contributing to fossil fuel consumption, you probably will not want to own stock in companies that don't have the same values. Many investors have begun screening funds and companies with environmental, social, and governance (ESG) factors to make sure their investment portfolios align with their core values and beliefs. This approach to investing can be empowering as it allows you to pursue wealth while supporting and driving change in your personal areas of interest. Please speak to your advisor about limitations and restrictions regarding these investments.

If you would like more guidance in aligning your money life with your values, please reach out to us to schedule a complimentary consultation. We would love the opportunity to help you feel more fulfilled and empowered in your financial life.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal.