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You probably expected that now, with the introductory posts out of the way, we’ll dive straight into creating budgets, tips for most frugal date nights, and the basics of investments. Don’t you worry, we’ll get there soon. But for now: Surprise! Before getting into the nitty gritty, we will look at an essential but often overlooked part of personal finances: your core values.
You might be thinking, “Why should I care about my core values when I just want to learn how to budget / save money / invest?” Trust me, understanding your core values is the foundation for making smart, intentional money decisions. When you know what really matters to you, managing your money becomes a whole lot easier.
What Are Core Values?
Core values are the principles that are most important to you. They’re the guiding beliefs that shape your priorities, your decisions, and how you live your life. Even if you don’t realize it, your core values are always influencing you. They’re formed by your upbringing, experiences, and what you learn as you go through life, both the ups and the downs.
For instance, if you grew up in a home where money was tight, you might value security and be really focused on saving. Or if you were always encouraged to explore new things, you might value freedom or adventure.
Common core values include family, health, growth, and creativity. You can find more on the Core Values and Their Connection to Money Management page.
Why Knowing Your Core Values Sets You Up For Financial Success
Have you ever bought something on impulse and then regretted it? Or made a purchase that felt incredibly satisfying? The difference often comes down to your core values. When your spending matches your values, it feels right, purposeful, and gives you satisfaction. When it doesn’t, you’re left feeling guilty or unsettled.
Knowing your core values helps you make better decisions with your money. It can cut down on impulse buys, reduce financial stress, and give you a greater sense of control.
For example, if you value family, you might feel good spending money on a family vacation. But if you splurge on a designer handbag, it might leave you feeling empty because it doesn’t match what truly matters to you.
How to Discover Your Core Values
If you’re not sure what your core values are, don’t worry – you’re not alone. Here’s a simple way to figure them out:
Step 1: Think About Big Moments in Your Life
Take a look back at important times in your life, both good and bad. Ask yourself:
- “When did I feel happiest and most fulfilled?”
- “When did I feel disappointed or let down?”
Look for patterns. For example, if helping a friend made you feel great, then generosity might be one of your values. Or if you felt drained after a stressful work project, maybe balance or peace is important to you.
Step 2: Look at Your Spending Choices
Take a look at your recent purchases and ask yourself:
- “Which things made me happy or proud?”
- “Which things do I regret spending money on?”
This can reveal a lot about your values. For instance, if you felt good spending on a gym membership but regretted buying takeout, it might show that you value health over convenience.
Step 3: Use a Core Values List
If you don’t know where to start, check out a list of values I’ve prepared: Core Values and Their Connection to Money Management. Choose 3-5 values that you feel strongly about. Don’t overthink it – trust your instincts.
Step 4: Rank Your Values
Put your chosen values in order of importance. This helps you see what takes priority when making tough money choices. For instance, if you value both security and adventure, you might decide to build up your savings before planning an exciting trip.
How Your Core Values Affect Your Money Habits
Once you know your core values, you’ll start to see how they influence your money decisions – whether it’s budgeting, spending, saving, or investing.
Budgeting
When you create a budget that reflects your values, it’s easier to stick to it and you’re less likely to overspend or waste money on things that don’t matter to you. For example, if you value security, you might put more money toward building an emergency fund and paying off debt.
Spending
Your values guide what you’re willing to spend money on. If family is a top value, you might prioritize spending on family activities. If you love adventure, you might save up for travel experiences instead of buying new clothes.
Saving
Saving becomes more motivating when it’s tied to your values. If you value freedom, saving for financial independence or a dream trip might inspire you more than just putting money aside for the sake of it.
Investing
Your values can also shape your investment choices. If you care about sustainability, you might invest in companies that focus on being environmentally friendly. If you value growth, you might choose investments with the potential for higher returns over time.
Aligning Your Financial Goals with Your Values
Now that you’ve identified your core values, it’s time to align your financial goals with them. Here’s how:
- Review Your Current Spending: Check where your money is going. Are you spending on things that align with your values?
- Make Adjustments: If your spending doesn’t match your values, make some changes.
- Set Goals That Reflect Your Values: Set financial goals based on your values.
Practical Tips for Value-Based Money Management
Here are a few simple, actionable tips to help you put your values into practice:
Tip 1: Create a Budget Around Your Values
Budgets built around core values help avoid overspending and regret. Instead of using generic categories like “entertainment,” use labels like “family fun” or “health.” This helps you focus your spending on what matters most to you.
Tip 2: Use Your Values as a Guide Before Buying
Before buying, ask yourself, “Does this align with my values?” If not, skip it. This simple habit can curb impulse buying and buyer’s regret.
Tip 3: Check In Regularly
Remember the importance of checking in regularly. Core values are not set in stone. Your values can change as you go through different stages of life. Review them every few months to make sure they still match your financial goals.
Figuring out your core values and aligning them with your money habits can help you make decisions that feel right. When your spending, saving, and investing reflect what matters most to you, you’ll feel more at peace and confident about your financial choices.
Start by identifying your core values and see how they match up with your current money habits. If things don’t line up, start making small changes. It’s amazing how these shifts can lead to a more intentional and fulfilling financial life.
I’d love to hear your thoughts! Have you noticed how your values affect your money decisions? Share your stories in the comments below!
Disclaimer: I am not a financial advisor, and the content on this blog is for informational purposes only. Investing carries risk, so it’s important to do your own research before making any financial decisions. The information shared on this blog is not intended to be financial advice or a suggestion to invest in any particular asset or strategy. For personalized advice, please speak with a licensed financial professional who can assess your unique situation and goals. Ultimately, all investment decisions are your responsibility.
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