To be effective at managing your finances, it is important that you understand your values regarding money. Some people value what money can do, they value it as a resource that can be used to better their lives or the lives of others and they think about it differently. On the other hand, there are some people that value it for what it can do for them now. Once you have an understanding of your values toward money, you can change how you think about money and what you do with it.
What are Values?
Think about it, you do what you value. We all do things that we feel are important or that we perceive as important — we value them. Your values are beliefs or ideas that you consider important or desirable. Everyone has values, but everyone does not value the same things equally.
Values are personal beliefs about what you regard as important, worthy, or right and tend to reflect upbringing, and change very little without conscious effort over time. Values are the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange. They can also be defined as the ideals, customs, institutions, etc., of a society toward which the people of the group have an affective regard. These values may be positive, as cleanliness, freedom, or education, or negative, as cruelty, crime, or blasphemy.
For example, you value your relationship with GOD so you go to church. Some value their relationship with good food, so they make it or go out and eat it. The same holds true for your money. How you value money determines what you do with it. Some people value money and what it can do so they save it, hold it high regard and set goals for it. Some have a short term view of what money can do and they spend it without much strategic thought. Their value of money is different than the group that saves it.
How do you Value Money?
To understand better how you value money answer this question. "If you had an extra $1000, what would you do with it?" Now, some would save that money for an emergency fund or for college education or to start a small business. They are thinking strategically about money and what it can do. Some would spend it on a big screen TV or a vacation. They are thinking about right now. Maybe you decide to give some of it to a charity – you value giving. You decided based on your values. Again, we do what we value.
It is important that we recognize our values and understand the values of other people with whom we closely interact. For couples to work together with money in healthy ways, it is beneficial to know how your spouse values money. How do they think about money? What do they think about money? When the two of you have this information, you can plan for your money together and plan better.
Values and Goals
Once you understand your values toward money, you can consciously think differently about your money. By understanding your values, you can make goals for your money and your finances that reflect your values and therefore have a better chance of reaching your goals. Because your goals are a reflection of your personal values, it is important to know that when you understand the values you can make better goals. Instead of buying a big screen TV with a credit card, maybe you make a goal to save money and buy it with cash – novel idea.
Additionally, the closer values and goals match your budget or spending plan, the easier it will be to reach your financial goals and eventually financial security. It is important that you recognize your values with money so that you can think and act accordingly.
Final Thoughts
By understanding your values as they relate to money you can better manage your finances. Values are personal beliefs about what you regard as important, and tend to reflect upbringing. They change very little without conscious effort over time. Values are the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange. Your goals are based on your values. The more harmonious your values are to your goals, the greater the likelihood of attaining them. Understanding your vales about money can help you be a better steward with your money; better effectively manage your money; and have better control over your finances.
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Knowing yourself is key to your finances. Knowing your trigger points for good and bad will always work in your favor. When your buttons are pushed you know before hand what your reaction will be.
Knowing yourself also helps in your relationships too. But this self awareness only is realized after many years of mistakes. Only age and experiences will reveal this to you.
Dave@50plusfinance recently posted..Are Extended Warranties Worth the Money
This is a very cool/interesting way to look at personal finance – looking deep inside yourself to figure out what REALLY matters in life, and then using money to help you achieve that. For me, more money would be used to help me achieve my life value of Freedom in exploring/traveling to new places.
I completely agree with your post. I have recently written something similar. I think that often times we get so caught up in what we’re “taught” or “tricked” into doing and spending, we don’t even recognize when our finances are out of alignment with our values. Great post!
bluskygirl recently posted..The Money Lie we Live- and the Truth that can set us Free
I am agreed with your article. It is very much important to understand your finances because it will make your life financially free and help you to achieve financial freedom in life. You just need to steps by which you can do that.
Denny recently posted..How do I invest in Property?
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