Do You Have Sound Money Values?

Money values are a set of beliefs about money and how it’s meant to be used. Do you see money as something that is meant to be spent and enjoyed in the moment? Or is watching your pennies so you can retire early your ultimate financial goal?

Whether someone’s financial values are positive or negative can influence the decisions they make with money. For example, research suggests that children who learn positive money lessons early on are more likely to be better with money and have stronger relationships as adults.

But where do money values come from? And are they set in stone or can they change over time? Understanding the impact of money values is an important step in improving your financial health. Read on to learn more about how money values are formed, and how you can better align your values and finances.

What Are Money Values?

When talking about values in finance or in general, you’re talking about beliefs. Specifically, values are beliefs that motivate people to action in some way and drive behavior. If you apply that concept to finance, you could define money values as a set of beliefs that drive financial decision-making.

Financial values can be formed in childhood through your first-hand experiences with money. For example, if you grew up in a household that emphasized saving and avoiding debt, then you might be more inclined to value the importance of stashing cash in a savings account and delayed gratification as an adult. On the other hand, if you grew up in a home with a parent who was a compulsive shopper, then your money values might tell you that buying things constantly is normal behavior.

Financial values can vary widely from one person to the next, and it’s possible that you may have developed money values without being consciously aware of them. But those values can affect the decisions you make when it comes to saving, spending, and handling debt.

How Do Money Values Work?

Money values work by shaping your decision-making with money. They act as a guide to tell you what’s acceptable behavior for managing money and what isn’t. So again, someone with positive money values might believe that carrying excessive amounts of debt or making unnecessary purchases are bad financial habits to avoid.

If you have poor money values as an adult because of your childhood experiences with money, then you might not see anything wrong with being in debt. Or you might simply think that having lots of debt is a fact of life, and there’s nothing you can do to change it. For that reason, having negative money values can be dangerous to your financial health, today and tomorrow.

The good news is that it’s possible to change your money values over time. It can take an effort to learn new values and behaviors and adopt a new money mindset. However, the effort can be worth it if you’re not happy with your financial situation and you’d like to change it for the better.

Why Are Money Values Important?

There are certain fundamentals for personal finance that can help you to get ahead financially. These include things like budgeting, avoiding high interest debt, and saving consistently. Your money values matter because they can determine how committed you are to practicing good financial habits.

Here are some things that positive money values can do for you:

•   Help you to be more disciplined with your money, rather than allowing money to control you

•   Make it easier to keep track of money because you’re committed to sticking to a monthly budget and avoiding unnecessary spending

•   Give you clarity when setting up financial goals so that you know exactly what it is you want to achieve with your money

•   Underscore your purpose for pursuing those goals so that you stay motivated and on track

•   Make decisions confidently with your money, whether it’s where to invest or what to say to a friend who asks for money

Financial values can act as a guidepoint or compass for you so that you don’t feel like you’re operating in the dark with money. Understanding your personal values toward money can also help with navigating relationships with people who might have different financial values. The clarity you have about how you want to manage your money can help you stay the course to meet your goals.

Tips for Determining Your Money Values

If you’re not sure what your money values are or you’re questioning what they ought to be, figuring it out doesn’t have to be difficult. There are some simple exercises you can do to drill down to your financial values and what money means to you.

Creating a List of Where Money Impacts Your Life

When setting up a financial plan that revolves around money values, it’s helpful to first understand how money affects your life. Making a list of areas where money impacts you the most can give you perspective on what money values you have and how they drive your decision-making.

For example, consider how money affects you on these levels:

•   Friendships

•   Romantic relationships

•   Family relationships

•   Work and career decisions

•   Hobbies and recreation

•   Health

•   Long-term planning (whether that means home ownership or retirement)

Also, think about how money affects you mentally and emotionally. If money is a constant source of stress, for example, that could be a sign that your money values might be getting in the way of good financial habits.

Creating Goals for What You Want to Accomplish

Setting goals can motivate you to make changes to your financial outlook, whether big or small. It can also help you to determine what your money values are and how your goals align with those values.

Making two lists — one for short-term goals and one for long-term goals — can give you an idea of what you’d like to do with your money. For example, financial short- term goals might include:

•   Saving an emergency fund

•   Setting aside money for a vacation

•   Saving up for new furniture

Financial long-term goals on the other hand might be things like saving for retirement or putting a large down payment on a home. You can never have too many money goals, but it’s important to be realistic about what you can achieve at any given time.

Visualizing Where You Will Be in 5-10 Years

Many people use a five-year plan to map out their goals and financial progress. If you’ve never tried this before, consider where you’d like to be five or 10 years from now.

The idea is to create as vivid a picture as possible. For example:

•   Where will you live?

•   Will you rent your home or own it?

•   What kind of work will you be doing? Will you be working a 9-to-5 job, be in grad school, or running your own business?

•   How much money will you have in savings?

•   How much debt will you have?

•   Where will you be in terms of progress towards your long-term money goals?

Visualizing your future self is an important exercise because it gives you something to aim for. You can start working toward it now by adapting your money values to reflect where you want to go.

Prioritizing Your Goals

If you have multiple financial goals, you might not be able to knock them all out at once. So you’ll have to decide which ones are most important to focus on first.

For example, many people question whether it makes sense to save or pay down debt. Saving first can give you a small cushion so that you don’t have to turn to a credit card if an emergency comes along. On the other hand, putting off debt repayment can mean paying more in interest over time. Which side of the debate you land on can clue you in as to what your money values are.

You can go through each of your goals and ask yourself how urgent that goal is for you. That can help you to better organize your list so you know what to focus on first.

💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Living Out Core Values

Once you’ve identified what your money values are, you can work on living them out in your daily life. In other words, that means making sure that your behaviors with money match up with your beliefs about money.

So, let’s say early retirement is one of your long-term financial goals; specifically, you’d like to retire 15 years from now. Ask yourself what you need to do on a daily basis to reach that goal. It might mean finding ways to make more money or prioritizing debt payoff. Or it could be as simple as saying no to a night out with friends in order to save some cash.

When you consider how even seemingly small decisions might affect you financially, you’re living out your core money values. The more consistently you can do that, the easier it becomes to create the kind of financial life you want.

Tips for Aligning Your Values With Your Finances

Getting into some simple routines with your finances can make it easier to align them with your money values. Here are some of the best ways to make sure your financial values are reflected in how you manage your money:

•   Make a monthly budget and and then stick to it

•   Review your spending regularly

•   Use credit cards responsibly by keeping balances low and paying in full whenever possible

•   Start a regular savings plan

•   Contribute to a retirement account if you’re not doing that already

•   Choose investments that match up with your values

•   Consider ways that you can reduce expenses and save money

•   Surround yourself with people who have similar money values.

Communicating about money with your spouse or partner is another important step. If their financial values are different from yours, then talking things over can help you to avoid conflict. You may not be able to persuade them to accept your values or vice versa. However, you might be able to reach a compromise on how to manage your money that you’re both comfortable with.

The Takeaway

Having sound money values can pay off if you’re able to feel financially healthy and enjoy the kind of lifestyle you want without racking up debt. Or perhaps positive money values will help you buy a house sooner or retire earlier.

Part of managing your money successfully involves choosing the right place to keep your money. When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can you be financially stable without money values?

It’s possible to be financially stable even if you aren’t aware that you have any money values. You can still make good decisions with money without realizing that values are driving those decisions. But having clear financial values to follow can help make stability easier to achieve.

What are bad money values?

Bad money values are values that lead to poor decisions with money. For example, someone who carries a large amount of credit card debt or relies on expensive payday loans to cover the bills may never have learned how to properly budget. Poor money values don’t have to be set in stone, however; it’s possible to turn them into positive financial values.

Do wealthy people have good financial values?

Just because someone is wealthy doesn’t automatically mean they have good financial values. A billionaire who runs a Ponzi scheme, for example, might have money values that tell them that it’s okay to defraud others for their own benefit. While having good money values can help you build wealth, you don’t need to be rich to make good financial decisions.

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