Financial management is an important part of your life, because you matter. Consequently, your choices with money. Managing money is not strictly about a budget; becoming adroit with calculations; following the stock market; or saving for retirement. All of those things are useful, but none of them are at the core of financial management. At the core of financial management are your values.
Your values are the driver of your choices in life. Of course, we all have constraints. A young man who dreams of playing professional basketball is constrained by his height. A young woman who desires to be a ballerina, may never pursue dancing, because her family cannot afford for her to take lessons. Someone born in Finland will have different opportunities than someone born in Turkey. Yet, within these constraints, we have many opportunities and choices. What choices we make, and how we approach opportunities are driven by our values.
Your values are the principles and standards by which you judge what is of worth and importance in life. Some years ago, I was in need of a job, and I knew that under my current time-frame, I was unlikely to find a “perfect” combination. I thought through the things I valued in my job. I came up with a list, and then I put a mark beside the ones that were must-haves:
| Job traits | Value? | Why/Notes |
| Interesting work: Policy-related, lots of opportunity for analysis |
X |
I’m good with data and storytelling |
| Required salary: Same/higher, with commensurate benefits |
X |
We need to build back our savings |
| Company and job title: Commensurate or higher | Not important | |
| Commute and travel: None or as little as possible |
X |
I want more time with my children |
| Co-workers: People I respected |
X |
I want to learn good work behaviors |
Knowing my values was useful, because it helped me figure out the best job fit for me at the time. Within a few months, I was off of unemployment, and re-employed. Of course, the very reason I was looking for a job, was because we were focused on saving money after a difficult financial period, which in itself was a value: living within our means, and recognizing that we need money to pay for house-related items. The job I’m in currently is on the tenth floor of an older building. I sit in a cubicle. My title is “Analyst”. Before I had an office with a window on the 12th floor. Upon review, although I liked my title, the company I worked for, and the work I did, the prestige of the job wasn’t something I fundamentally valued. It wasn’t worth spending my time, money and energy on.
Values help you make decisions, and allow you to focus. Even if you do not focus on what your values are, you are still living them. If you pay a mortgage on a large house, you are valuing your house. If you give money to a political candidate, you value that person’s political role. If you put money on blackjack, you are valuing gambling. When you give money to someone in need, you are valuing charity.
If you want to bring how you spend your money into alignment with your values, or if you are trying to figure out what you value, consider looking at every item and service you spend money on as a value. Start changing how you speak about money: Replace the words “spent money” with the word “value.”
I spent money on pizza → I value pizza
I spent money on coffee with my friend → I value coffee with my friend
I spent money on a new car → I value a new car
I gave money to my friend without a job → I value my friend without a job
Money is one of the principal ways you express your values. Try rephrasing your financial choices with value statements. You will notice that your values are the backbone of financial management, and it will help you make better decisions.
Photo by Oisin Conolly on Unsplash