If you’ve never heard of values-based budgeting, today’s exercise is aimed at helping you create a financial plan based on your values which will naturally make budgeting a whole lot easier. Living a life based on what you value is the best way to live a life full of joy, happiness, and contentment. But first, we have to determine what we value.
What do you value in life?
Often when I ask people that question, they have to stop and really think about it.
Hmm, what do I value? I can hear the wheels turn in their mind as they begin to think about what matters most to them.
Values are an integral part of who you are. Your values are what you are naturally inclined to do, are eager to do, drawn to without effort or goal setting. For example, if you value family, you naturally spend time with them. You don’t have to force yourself to spend time together; it’s as easy as breathing in and out.
When we live a life based on our values, when our values are aligned with our goals, when we can get what we want and get our needs met then we are fulfilled. Fulfillment is beyond satisfaction and happiness. It’s that long lasting feeling of total authenticity — of you being totally you. That’s our goal.
Values Based Budgeting
Since money has so much to do with how we live our lives, it’s time to evaluate your values so they can be incorporated into your financial plan.
We don’t usually think about how money and values are linked together. But your attitudes about money are what defines everything that matters to your personal financial situation: how much money you need, how hard you’re willing to work for it, how you’ll feel when you finally get it and more.
That’s why I can say with total confidence, once you understand what money really means to you, you’ll be unstoppable in creating the life you want.
The process I am taking you through is the single most effective tool I know to help you create a plan that will lead you to financial security because you’ll be living the life YOU want and not what society might otherwise dictate.
The process of understanding the what and why of money quickly forces you to evaluate your life. Understanding what you’re looking to accomplish in life is the foundation on which all smart financial planning is based.
Think about this – how could you possibly put together a financial plan unless you know what it is you really care about?
Let’s say money and the security it provides is important to you, but your current state of financial affairs has you living hand to mouth. Well, something is very wrong, isn’t it? Clearly, your financial behavior is out of whack with your deepest values.
Similarly, if money and the freedom it can bring you is important to you, but you are tied to a job working 60 hours a week to pay a mortgage on a large home, then something is out of alignment. Once again, your financial life is in conflict with what you’re really all about.
Money is not an end unto itself. It’s merely a tool to help us achieve some particular goal. If the way we handle our money conflicts with our personal values, we’re not going to be happy.
What makes this super easy is the fact you already know what you value. Most of us have a pretty good sense of who we are and what’s important to us.
The Challenge is Now Closed.
Once completed come back here to finish today’s lesson.
Money and Values
You’ve identified your values, and you’ll be working at honoring and aligning your goals with these values tomorrow.
For today, I have one last exercise for you to do. Grab the form I’ve created and answer the following questions.
When thinking about the answers, remember your answers must reflect how you feel – not how you think someone else thinks you should feel. Whatever your values and goals, they are the right ones for you.
1. What’s important about money to you? Look at the values you’ve already identified. Is there a value on that sheet that helps you identify what’s important about money to you? If not, pick a value that bests answers that question for you. Remember to pick a value not a goal.
Let me offer some examples to help you as you do this exercise.
Maybe you’ve just gone through a terrible divorce and find yourself on your own with three kids to take care of. Maybe you value “security.” Or maybe you’re an entrepreneur who dreams of traveling, in which case your initial value may be “freedom.”
If you didn’t pick that value, ask yourself what’s important about that value to you? Did it get you closer to one of your top ten values?
If not, keep asking yourself this question until you can’t think of any other value that is more important, even if it’s not one of your top op ten values.
If you choose a value that wasn’t on your top ten values list, then I encourage you to go back and do the exercise again because something is off for you, and you might just need to reflect on your values a little more.
When you do this exercise, you end up understanding what is most important to you. Understanding this, you should be able to stop wasting your time, energy, and money on things that don’t really matter, and begin focusing your resources on the things that do.
A values-based approach to handling your money and your life is not New Age Feel Good Stuff! Remember the Greek philosopher Socrates? He coined the phrase, “Know Thyself” for a reason.
Don’t skip this step!
A values-based money plan ensures you are focused on creating an authentic and happy life.