Walt Disney Company co-founder Roy Disney once said, “when your values are clear, your decisions are easy.”

People often struggle to make financial decisions/progress because they don’t have clearly defined goals. Setting good, motivating financial goals requires making sure those goals align with your values.

Often we start the journey to accumulate as much money as possible with the idea that if we have enough money, everything else will work out. However, the truth is money itself isn’t what’s valuable. It’s only important to the extent that it pays for the experiences which are truly valuable to you.

In this blog post, we help you ask and answer the question, “what is important to you about money?” and explain why developing and working from a financial plan is the best way to accomplish your financial goals.

“What’s important about money to you?”

Your goals are the tangible representation of your personal values, your personal “why?” For that reason, you want to start the planning process by defining your values through the “value’s climb exercise” (see image below). For example, ask yourself the following question: “What’s important about money to me?”

“Money makes me feel secure.” Great! What’s important about security to you?

What's Important To You About Money Chart

“When I feel secure, I have a sense of freedom.” Fantastic! What’s important about freedom to you?

Follow this line of questioning, substituting the last answer, security for money, freedom for security, etc., until you can’t go any further.

Does more freedom give you a more balanced lifestyle, spending more time with your loved ones? Does more balance allow you to feel more fulfilled? By being more fulfilled, could you help others? Does helping others, in turn, enable you to be the best version of yourself? If you’re the best version of yourself, are you then living a meaningful life?

It seems like a long walk to find your answer. Yet, you clarified your values by critically thinking through just one question.

How to turn your values into action.

Once you clarify your values, you can brainstorm the specific goals you want/need to accomplish to support those values. For example, how much consistent, passive income would you need to feel financially secure? That’s a dollar amount, and you can define concrete steps toward making that a reality. Do you want to plan annual family vacations to increase the balance in your life? Maybe you want to retire or be able to pay your children or grandchildren’s college tuition because you want to help others. By defining these specific goals that align with your values, your financial decisions become clear.

Once you have your personal “why” in mind, you can bring your goals to life. Write down your goals, the date by which you want to accomplish each, the cost to fund them, and how you would feel once you reach each milestone. Finally, prioritize your goals in order of importance. Congratulations, you’ve just outlined your financial plan!

What’s the importance of a financial plan?

NASA wouldn’t have just launched a rocket filled with astronauts into space without a plan of action to land safely on the moon, right? The same goes for creating your financial plan. A lot of people want to jump into implementing financial decisions. However, great success with a plan comes from defining a goal, breaking that goal down into concrete steps, and then executing those steps consistently.

So, what is important to you about money?

The fact is that the future will come whether you plan for it or not. So will you have the future you want, OR will you have the future that happens to you by default?

The purpose of designing and executing a financial plan is to help you achieve your financial goals and live the life you want.

Our fiduciary financial advisors can help you build a financial plan to accomplish your goals. Schedule a consultation with them by clicking here.

Are you unsure what the difference between a fiduciary and a broker is? Read more on what sets them apart in our blog post 5 Huge Differences Between a Fiduciary and a Broker (part one). 

 

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