“Understanding your life values will help you determine how you should be planning your finances.”
Majority of the time, your spending choices reflect where your values lie but you may not even realize it. Let me explain. If you pull up your bank or credit card statements over the last 3 months and do an assessment of where you’ve been spending your money the most, does it line up with the direction you’d like your life to follow?
For example, if you value travel experiences with loved ones or you are trying to save for a down payment on a house but instead your bank statement shows several transactions that you made at the mall then your spending choices are not in line with your life values.
Here are 10 questions to ask yourself in order get your spending in-line with your life values:
(Get a pen and paper and write down your answers!)
- Where do you see yourself in the next 1 and 5 years?
- How much would you have liked to save?
- What about in 10 and 20 years?
- How do you imagine your life?
- Do you want to travel around the world?
- Do you want a big house? A nice condo? Multiple homes?
- What kind of schools do you want your children to go to?
- Do you see yourself working in retirement?
- What type of impact do you want to make in your community?
- How do you want to give back?
Once you’ve answered these questions, make a conscious effort to manage your spending around your values. This doesn’t mean all trips to the mall are banned but it means instead of spending all this money at the mall, you redirect some of it to your long-term accounts, your travel accounts, your home down payment account etc.
In addition, you need to frequently revisit your values, once a week, once every couple weeks or once a month to make sure you don’t get side-tracked. Put a reminder on your phone calendar or in your planner. Remember, understanding your values and working towards them will help you shape your financial future.