Your attitudes about money, most shaped from childhood experiences, define everything that matters when looking at your financial situation (i.e. how much money you will need to live the life you want, how hard you are willing to work for money and how you feel once you have money). Understanding what you are looking for in life is not an easy question, but it is the foundation upon which all your financial planning decisions should be based.
The process of understanding what’s important about money to you is a critical step in the financial planning process. Asking yourself this question forces you to evaluate what you want in life and discover what really drives you when it comes to money.
To help you answer this question, I suggest you start by writing down your values on paper and creating your values worksheet. This can be an extremely effective tool to help you identify what is motivating you (or preventing you) from taking control of your financial future.
Here are the steps to creating your values worksheet:
Start by relaxing. This will allow some time for you collect your thoughts and really think about what your values are, not someone else’s.
Ask the first question – What about money is important to me?
Write you answer on the bottom of the paper. Make sure you come up with values and not goals. Values include happiness, security, helping others, freedom, etc. Goals usually have specific amounts connected to them such as retire with $1 million in assets, etc.
Now move up the worksheet by asking “What about_____________ (your first value) is important to me?” Write your answer on the top of the first value.
Keep moving up the paper by asking “What about_____________ (your second value) is important to me?” Write your answer on the top of the first value.
Continue to climb up the worksheet and remember to dig deep, thinking of the values that are most important to you and you only. You will know when you’re done when you cannot think of anything more important than the last value you have written down.
Lastly, make sure to review your values worksheet on a regular basis and refer it when making financial decisions, to ensure they are in alignment with your values.
Understanding your values and what about money is important to you will make it easier to stick to your financial plan and plan for your financial future. Values are the things we believe in and are what motivate and shape us. Once your values are clearly defined they can help you reach all your financial dreams and goals in life. Congrats for starting off on the right foot and getting to know your true money values!