Using Your Values to Make the Best Money Decisions

What’s most important to you? What do you value most in life?

Do your actions each day line up with what you say matters most to you?

Do you spend your time and money in ways that support your values?

Whether you realize it or not, your bank and credit card statements tell a lot about what you prioritize.

Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are. – James W. Frick

Your money decisions are a reflection of your values. Even when you’re not dealing with your money, you're making a money decision (the decision to do nothing is still a decision).

So whether you’re spending, or not spending, saving, or not saving, investing, or not investing – these are all money decisions.

By lining up your money decisions with your core personal values, you’ll be able to focus on what’s most important to you.

The Value of Knowing Your Values

Many of us start adult life intending to be “successful.”

Everyone’s definition of success is different. But sometimes the idea of what “success” means is influenced by external factors.

It can come from others – such as friends, family, neighbors, or society in general. And when you try to live up to other’s definitions of success, things can get out of whack.

If you live your life according to what you think you “should” do to become successful in life, eventually, something won’t feel right. There will be a sense of unease and discomfort.

This could feel like discontent, guilt, stress, unhappiness, depression, or frustration.

It will manifest in ways that make some things in your life feel like a burden. (You may try to escape or avoid these things to make yourself feel better.)

This feeling of dissatisfaction is a good sign you’re making decisions and behaving according to someone else’s values. Not your own.

When you do the work to identify your values, you can start living your life.

You’ll make the right decisions for you, and you’ll feel good about them. You will also feel less stress, more motivation, and be happier and more content.

You'll spend your time and your money in ways that feel right for you.

Use Your Values to Guide Your Money Decisions

Money isn’t the goal. It’s a tool to help you reach your goals. Money can help you do what’s important to you to live your most meaningful life.

Your values will help you plan your financial future. They will determine your money goals and help you write your financial mission statement. And they will guide your daily actions to help you reach those goals.

Does your money line up with what’s most important to you?

Before you can answer that question, you have to identify what’s most meaningful in your life.

Identify Your Core Personal Values

You already have a good idea of your core personal values. But going through the exercise of asking questions, reflecting, and writing down what’s most important to you is invaluable.

Questions to ask yourself (write down the answers!):

• What’s most important to you in your life?
• Why are these things valuable to you?
• How can you make them a priority?

There are many values exercises available to guide you and help you dive deeper. Below is a brief values exercise to start with (based on a values exercise from TapRoot).

1. Look at a list of values and write down all the values that resonate most with you. (Don’t hold back!)
2. Group your list of values into five groups of similar values.
3. Pick one value out of each group that most speaks to you, the one that encompasses the overall feeling in each group of values.
4. Once you have narrowed down your five core values, write them down. Add a verb to the beginning to make them feel more actionable. (For example, if Love is one of your values, you can write down “Act with love,” or something that feels functional to you.)
5. Take it a step further and look at the values that you are actually living. Look at your calendar and your money (more on that below). Are you living in a way that reflects your core values? Are you making the most important things a priority?

Align Your Values with Your Money

Take an honest look at your money situation. Pull out your bank statements, credit card statements, and bills. Examine your spending, your savings, your debt, and your net worth.

If you feel guilty or uneasy about some areas of your financial life, it’s a good clue that your money is out of balance with your values.

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. –Ayn Rand

Using your money in a way that aligns with your values will make you feel more in control and content.

Consider your money decisions and core personal values.

• How do your value statements line up with your money decisions?
• Do you spend in ways that you feel are important?
• Are your money goals in line with what you want your life to look like? If not, how can you start making changes to line them up?
• How much money do you need to do the things most important to you?
• What specific changes can you make to align your money with your values better?

Identifying your values will help you cut out spending on the things you don’t care about and use your money for things most important to you.

For example, if health is one of your core values, you might spend less on fast food and more on quality foods and fitness.

If relationships are a top priority, you might spend on vacations and other activities with friends and family, but cut out spending on different things, like clothing or car payments. You get the idea.

Use Values as Your Compass

It’s easy to get caught up with the busyness of life and let values slide. We all do it sometimes. That’s why it’s so important to refer to your values often.

Pull out your list of values often – daily, weekly, or monthly.

• Have your values changed (they can!)?
• Is your money (and time) aligning with your values?
• What changes do you need to make, so life is more in harmony with your values? (Specifically, look at money and time.)

Anytime you are making an important decision, pull out your values. They will point you in the right direction.

Your values are your compass, your guiding light. They are the key to making the right money, time, and life decisions that are best for you. By knowing your values, you can cut out things that aren’t important to you and focus more on the things that are.

Additional Reading: How Do I Adopt An Abundance Mindset and Why Is It Important?

Article written by Amanda