Having a healthy relationship with money is key if you want to grow your wealth and control your spending. But, how do you go about achieving this healthy relationship?
The key is to understand your money values. But first, let’s back up. What, exactly, are money values? In a nutshell, money values are a set of external and internal factors that determine how you feel about money. Your money values help shape the financial decisions you make in your life – for better or worse. Money values, for example, are shaped by your childhood experiences with money, your current income, your social groups, and your goals and ambitions. Ideally, you want to have positive money values as this means you’re comfortable with money. This, in turn, also means you will spend and save wisely.
To help you get on the right financial track, it’s important to figure out whether you have good money values. If not, it’s never too late to make positive changes. To access your own values, ask yourself these three questions:
Do your money values align with your priorities?
I sometimes work as a caterer on the weekends. It’s pretty good money, I often get to bring home free food, and the paychecks come every two weeks. I earmark the steady paychecks toward my retirement accounts.
Oftentimes, after events, the staff will go out for a few drinks. I never join them. You see, if I go out after work, I know I’ll end up spending my hard-earned catering money, which moves me further away from my goal. I value my retirement savings more than a few drinks out, and this forms my decision to not go out.
The reason I tell this story is to reiterate the importance of asking yourself if your money habits align with your priorities. If not, it might be time to change some of the choices you make so that you can move closer to your financial goals.
Do your money values move you closer to financial stability?
When it comes right down to it, your money values should help create stability in your life. It’s easy to understand why as living paycheck to paycheck is difficult. Likewise, no one wants to be constantly in debt.
To feel financially stable instead of on the brink of uncertainty, you’ve got to first recognize whether your money values are causing your cash flow issues. If so, it’s time to change your ways. For example, if you value buying whatever you want, but your spending habits have put you in debt, your money values are clearly a problem.
To help you change your habits and reach financial stability, you can start with baby steps like tracking your spending, creating a reasonable budget and setting financial goals. You can use a good old fashioned excel spreadsheet or an app like You Need a Budget or Mint. Either way, a budget will help you determine how much you can afford to spend each month. You can then use the extra money to pay down debts, start an emergency fund and build your retirement nest egg. Another tip: Automate your savings account to help you build up your savings cushion.
Think of it this way: Aligning your money values with creating financial stability means that you’ll be able to spend your money without fear of unhealthy repercussions.
Do your money values make you happy?
I love it when my friends ask me money questions. I truly believe in creating more transparency around money and it makes me happy to help my friends.
To back up a bit, when I was paying off my student loan debt, I worked seven days a week in the pursuit of debt freedom. I dedicated every spare moment to earning more money or slashing money from my budget. I was making monster debt payments, but I was unhappy. There was no room in my schedule for self-care or fun. I never went out because I didn’t want to spend money. My passion for money became a chore. Although I became debt free, I did not enjoy life at the time.
The difference between my money value now – creating transparency around money – and my value then – paying off debt no matter what – is that my current value enhances my life and my former value detracted from it. Today, creating transparency around money means two things: I get to interact with people and I get to talk about a topic I love.
As you can see, your money values impact how you think, save, and spend. Your actions, in turn, determine how you live your life. When your money values are in line with your goals and your actions are in line with your values, you lead a happier life. With this in mind, take some time to identify your money values and discover what really makes you happy. You’ll be on your way to living a life that you love. Better yet, you’ll be able to afford that life.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.