You’ve reached a point in your life where your financial priorities are not just about making ends meet or saving a few bucks. You want your financial habits to align with something deeper, something that drives you and brings fulfillment. Now, it’s time to discover the monetary values that will define the next stage of wealth generation for you and your family.
As your wealth grows, your financial priorities evolve into something different. While the core values of purpose, frugality, and discipline have guided you to success, there is a point when your financial habits shift. Now, you see your money not as something to obtain but something to grow — so you can experience the complete freedom to do the things you want.
What Are Your Financial Values?
Financial values are often described as the monetary principles that guide you. Those ideals are what motivate you, influence your decisions, and shape your behaviors.
These core values represent the motivation behind your spending habits, like luxury, education, vacations, or relationships, the investments you make, or the savings you put aside. You would be surprised as to how often your financial values and personal values overlap. (I sure was!)
Discover Your Next-Level Financial Values
To better grasp your next-level financial values, you have to be willing to ask yourself some big-picture questions and then spend time pulling out specific answers. While the basics remain the same, the financial decisions you make now may be more technical and require some extra help to ensure their success.
Take a Step Back
Imagine you are meeting yourself for the first time. You are looking at your history, your decisions, your successes, and your failures. Stopping and reflecting on your past financial decisions gives you a chance to re-evaluate your financial priorities and what helped get you to where you are today (a mini-retrospective of your financial life).
Reflect and Analyze Thoughtfully
Start by asking yourself: How did I get to this point in my financial life? What do I want to accomplish with my money? How do I define financial success? What were my financial priorities? How did my financial habits evolve when I got a raise, or my investments paid off? What goals do I have with my money in the future?
Take a closer look at your financial decisions and analyze your proud moments (and the embarrassing ones). Identifying your most and least favorite experiences with money can help you understand the behaviors you prioritize. These past priorities give you insight that can define your future financial values.
Organize Your Thoughts
Now that you have stepped back, reflected, and analyzed your past financial decisions, it’s time to make two lists. First, make a list of all the things related to money that are important to you: saving, investing, giving, etc., and set that aside for a day. Next, make another list, this one a list of everything important to you. This list could include values like honesty, discipline, or philanthropy.
Compare the two lists and see if there is any overlap. By organizing your thoughts and values on these two lists, you can find similarities and overlaps that will guide you toward future financial action.
Core Values + Reflection = Action
After spending the time to determine what is most important to you, it’s time to put those core values to work.
SMART Goals Lead to Targeted Action
Simply saying, “I want to be ready for retirement” is not a goal. That’s just an empty statement. If your goal is to be prepared for retirement, you need to create a Specific, Measurable, Attainable, Relevant, and Time-specific goal.
- Specific: State exactly what you want to accomplish and the steps you will take to get to that point. “I will increase the amount I save for retirement every year .”
- Measurable: Add in numbers so that you can track your progress. “I will increase the amount I save for retirement by 2% every year.”
- Attainable: Make your goal something reasonable to achieve, based on your financial situation. “To increase my likelihood of retiring, I will increase the amount I save for retirement by 2% every year.”
- Relevant: Ensure that every goal is related to your financial values so you know you are on the right track. “To increase my likelihood of enjoying a fulfilling retirement by doing what I want to do, I will increase the amount I save for retirement by 2% every year.”
- Time-specific: Include a deadline so you can look forward to the goal being reached. “To increase my likelihood of enjoying a fulfilling retirement by doing what I want to do, I will increase the amount I save for retirement by 2% every year for the next 10 years.”
By creating a SMART goal, you can transform the simple phrase ‘I want to be ready for retirement’ into “To increase my likelihood of enjoying a fulfilling retirement by doing what I want to do, I will increase the amount, I save for retirement by 2% every year for the next 10 years.”
With this well-thought-out goal, you now have actionable steps that you can take. This structure is something that can be applied to all your financial priorities.
Decide Where Your Money Goes
Now that you witness the power of SMART goals, the next step is taking deliberate action to align your financial goals with your core values.
Knowing your priorities and making goals is not enough. You have to make a plan for where your money goes and what you should prioritize. Here are some potential financial priorities that may align with your newly discovered core values:
- Wealth preservation: You’re looking to preserve your wealth for your descendants. You are motivated to invest in trust funds, estate planning, and tax-efficient strategies to ensure your assets remain secure and grow over time.
- Philanthropy: You will focus on setting aside a portion of your wealth for charitable endeavors, endowments, and strategic giving.
- Luxury: You may choose to invest in high-end properties, luxury vehicles, or exclusive experiences.
- Retirement: You have decided to max out contribution limits to retirement plans, use tax-efficient strategies to minimize your liability in retirement, and diversify your holdings to limit market volatility as much as possible.
- Education: Your choices revolve around providing your family with top-tier educational opportunities, from prestigious schools to advanced degrees.
Learn More About How to Discover the Core Values That Should Guide Your Financial Decisions with Legacy Planning
It’s not just about managing wealth; it’s about creating a purposeful and enriching financial journey that aligns with your core beliefs. No one can predict what the future holds. But, there are various financial tools that you can use to hedge your investments and wealth against potential volatility.
By identifying your financial priorities, defining your financial values, and establishing financial habits that cater to your unique circumstances, you can navigate the complexities of wealth management with confidence and clarity. Your wealth should serve as a means to fulfill your deepest aspirations and values, making your financial journey a truly rewarding one.
At Legacy Planning, we enjoy assisting our clients in identifying their financial priorities, defining their financial values, and establishing financial habits that help them achieve their goals. We can provide direction on how to apply your core values to build your wealth. To see if we can help you, click here to schedule a conversation today.
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.
