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We all need something to strive for, a benchmark to measure our performance against, a means to motivate ourselves. This is where goals come into all areas of our life.
When we talk about setting financial goals, these can range from saving a relatively small amount to replace a pair of outgrown children’s shoes, through to having several thousands to put your children through university.
But did you know that approaching your finances via a set of goals which are fully aligned to your individual and social values means you are significantly more likely to achieve them?
This is why as a money coach, I help clients to get clarity on their values up front before we even start looking at the goals they have.
Follow your values and you’ll find the path of least resistance when it comes to having a good relationship with money.
So what are your values?
Your values are what matter the most to you in life.
For me I value:
- Spending quality time spent with my family and friends
- My health, and the health of my family
- Ensuring that my children live a life which is at least as good, if not better, than my own
- Making an impact in the world and being able to leave a legacy
- Choosing work that I feel really passionate about and that lights me up
- Freedom to choose when and where I work
- Supporting others in wider society in a meaningful way
- Good wine!
When I decided not to return to my job in Corporate Finance after having our first child, it was a values based decision with a financial implication. I valued spending quality time with her, which I knew I wouldn’t get commuting and working long hours. The financial implication was that we became a single income family for a period of time, which then impacted several other different life goals.
In another personal example, as we approach 40, the value we place on our health and fitness is increasing. This means that we are content spending what to many would seem a very high amount each month on a family membership for our local David Lloyd club. However, we spend a lot of time there as a family and it is an expense which aligns fully with how we are prioritising living a healthy lifestyle.
** Check out my bucket list of #40thingsbefore40 here **
Values and personality
Money personality profiling is central to my work. I know how insightful it is to understand more deeply your individual personality.
Personality represents our patterns of thinking and feeling, which directly impacts our behaviours.
Values aren’t the same as personality; our values represent what we believe to be right. They are deeply held principles that guide our choices and influence our emotions. We tend to gravitate towards people who share our values and often have strong reactions to people who don’t.
Our life decisions and behaviours are a function of both our personality and values.
Have you ever sat down and really considered what your core values are?
Come up with a list of values that you feel you strongly identify with. If you find this difficult off the top of your head, then ask yourself what are the things which are most important to you in your current stage of life. What does each mean to you? What does it give to you?
So what themes do we see in values elicitation? (that’s just the fancy name for coming up with your set of values!)
Values around how we see ourselves and how we believe others see us.
These values include our self identity and our social identity, our need for safety and security, religion etc. These personal values also define our sense of purpose and meaning in life, and the principles by which we live. Values in this theme may reflect the desire for freedom, preferences around working alone or with others, outer projection of success versus inner contentment.
Values around how we belong within a community of other people. This can encompass both family and wider society.
We all have money scripts we are passed down to us in our formative years. What you saw, heard and experienced as a child from those around you form the belief system which dictates your behaviours in adulthood. How you approach shared responsibilities in a couple (or a shared house), whether you prioritise caring for others and charity/volunteering and your affiliation with causes that mean something to you, are central to this value theme.
Values around security and sustainability – what I like to call ‘having enough-ness’.
What ‘having enough’ means to you is a function of what you believe to be true here. In a financial context, regardless of your level of income and/or wealth, you can be driven by strong financial values to plan, be organised and save for long-term security.
Values around the tangible elements which make up the material world around us, as well as our physical health and well-being.
These physical values relate to the amount of space we need to feel comfortable, how we need to be to feel ‘alive’ and healthy, and our desire for possessions.
The benefit of knowing your core values
Arguments and disagreements about money are almost always associated with people having conflicting values.
‘In the moment spenders’ and ‘long-term thinking savers’ have totally different value patterns. Those who spend to elevate their status in the eyes of others do not share values with those for whom materialism is just not important.
Defining your own values enables you to look critically at things you thought were important to aim for – your life goals – and assess whether they are aligned with those core values. Doing this with a partner is eye opening, especially if your values differ.
Often in doing this exercise, we may realise that what we are aiming for in life isn’t necessarily our own goal but someone else’s.
Do you know people who work in specific jobs that they chose initially for their parent’s approval? They hate the job now but stay for fear of losing that approval.
What about those people who are house hunting in a cheaper area, even though living there would mean a lengthy commute. Traveling would keep them away from their family longer each evening, which doesn’t align with their desire to enjoy more family time together.
These are examples where values could be in conflict with how someone is living their life. Interesting, huh?
Determine your core values first. Then look at what you want out of life and what you’re working towards. Do the two align? If not, it’s time to rethink the choices you are making.
When we understand what matters most to us, rather than acting without any conscious awareness, we can choose with the path that aligns at our core values level. This is what I call choosing the path of least resistance – a lower level of stress and other negative emotions will materialise when your choice matches up with your values.
When we are operating in accordance with our highest values, we experience congruence and a deep sense of satisfaction. You just ‘feel’ good.
When we are aligned with our values and they drive us forward, we can tolerate greater pain and discomfort in pursuit of what is important to us. I listened to an amazing podcast on this recently. Using the example of saving for my children’s university fees; it would feel painful to put away money each month that we can’t enjoy today for something in the future, except for the fact that I place a high value on their education and giving them a good start to their adult life.
Making financial decisions
Before making any decisions which have a financial impact (and most decisions do in some way), ask yourself:
- How do the different options make me feel in relation to my security?
- Does this option make me feel purposeful and that I have meaning in life?
- Which option enriches my connection with others the most?
- Is this option doable given my current financial situation?
- Does this option elevate my physical environment and how does this make me feel?
Revising your goals and making new choices in alignment with your values will change your future. If you are looking for a better future that doesn’t feel like an uphill struggle to achieve, give this values work a go. I promise it will all fall into place.