Let's Talk About Values & Financial Decisions
March 22, 2023 by Myra Alport
Ever lie in bed at night and worry about meeting your financial obligations now that you are on your own?
Or maybe you wonder why everyone else seems to have their money sh*t together and you don’t.
I know all too well. It’s nerve-wracking and overwhelming. Read on.
Let’s look at a simple exercise that helped me pull my financial life together after my divorce.
Start by taking some quiet time to identify your personal core values. You know, the things that are most near and dear and bring meaning to your life.
Because once you are clear on your values, you can better align your behavior and spending choices with them and tune out the noise.
This process will help you nail down the many tough choices about how you put your dollars to work. As you align your goals and choices with your values, your decisions will feel easier and more purposeful.
What Are My Core Values?
Let’s begin with author and thought leader Brene Brown’s values exercise. From this core values list, choose the top 10-15 that speak to you. From these, work your way down to the top 2 or 3 that are non-negotiable in your eyes. These represent your true north, so when push comes to shove, your choices will be guided by them.
What Are My Money Goals?
Thinking both short and long-term, write down a few of your money goals and assign a time period for each. Ask yourself - what am I working toward in a week, a month, a year? How do I prefer to spend my time? If maintaining good health is a core value, is your spending supporting that? Are you regularly exercising, scheduling medical appointments, practicing self-care, and eating healthy OR are you paying for an expensive gym membership that you never use, binge-watching the latest Netflix series all weekend, and dining out all of the time?
Catch my drift?
Let’s look at how 2 women value financial freedom after their divorces:
Divorced at age 61, Ann contributes to her workplace retirement plan and automates saving to an emergency fund and a “fun money” fund. Although she knows she can begin taking Social Security as early as age 62, she decides to work until 67 to maximize her benefit. She carefully tracks her spending to live within her means because she wants to travel, spend time with family, and support her favorite charities in retirement.
Contrast with Terri:
In her divorce settlement Terri received a cash payout and spousal support for 5 years plus the family home. Instead of returning to work, which she was strongly encouraged to do in the divorce agreement, she spent freely on lavish vacations and shopping excursions like she did during her marriage. She bought 2 rental homes to provide passive income because she heard that’s a good way to build wealth. During year 4 of spousal support, her rentals started to drain her cash flow due to costly repairs. Terri has a mess on her hands.
Thoughts? Here are mine:
Ann is a rock star! Her retirement plan is aligned with her core values of financial freedom, family, and giving back.
In Terri’s case, owning rentals can be a good investment if they are adequately managed with funds set aside for repairs. Now, Terri has to face some tough decisions because she has been focused on living in the moment instead of the long term.
Financial freedom is not just about today. It’s for the rest of your life, however long that is.
Grab this opportunity to build a new life. If you are feeling ungrounded and overwhelmed, live in alignment with your values and purpose. You can’t go wrong.
I’d love to hear how your values are guiding your choices! Please share your stories with me at email@example.com.