We all relate to the idea of having values. However, we tend to think of things like honesty and kindness when we consider our values. Though you might not think about them, your financial values are important to your happiness and future, too. Do you know your financial values? Have you ever considered them?
If you possess a clear understanding of what’s most important to you, you’re much more likely to experience the financial life you desire. Take the time to discover your financial values.
Choose your financial values and enjoy an abundant and satisfying financial life:
1. Imagine you’re dying. Suppose your doctor told you that you only had 5-10 years to live, how would you spend your money and handle your finances? Would you buy a boat and sail the world? Would you scramble to save as much as possible for your children’s education?
2. Think about your non-financial goals. Is it your dream to visit Paris? What are your health goals? Do you need assistance losing 25 lbs.? Do you need to see the dentist more regularly?
- Your most important non-financial goals will help to determine your financial values.
3. Imagine how you would live if your income dropped. If your household income dropped by 20%, what would your family budget look like? What activities would still make the cut? How would you spend your leisure time? Consider which activities and luxuries would be the first to go. How would your saving and investing habits change?
4. Imagine how you would live if your income increased significantly. Imagine you’re earning an extra 50%. How would you live? What new items, activities, and services would you add to your life? You might even drop a few activities to make room for something new.
- The changes you would make can tell you a lot about your financial values. Would you spend much of the increase and save little? Would you save the entire amount?
- Would you finally be able to afford something very meaningful to you? You might enjoy playing your $500 keyboard, but the thought of sailing in your boat makes your heart melt. The activities you’re currently engaging in might not be your first choice if you had more money available to you.
5. Consider your retirement. How would you like to live? Where would you like to live? How important is your retirement compared to the present? Would you rather live well now or in the future?
6. How much of your time would you trade for 20% of your income? If you earn $50,000 per year, how much of your free time would you give up for an extra $10,000? Would you give up your all of your vacation time for the entire year? How many weekends would you trade for an extra 20%?
7. Which charitable organization means the most to you? Even if you can’t afford to give it any money now, which organization resonates the most with your values? If you had extra funds available, would you give it to that charity or spend it on yourself?
- Would you like to help the homeless or send an economically challenged child to college?
Consider your financial values. Are you living them accordingly? Do your financial habits match your core financial values? Take the time to consider how your life would change if your income changed significantly.
Most of us know which personal characteristics are the most important to us. Discover your financial values and plan your finances accordingly.