And you know, you can save money by borrowing the books from the library.
WHAT'S THE PURPOSE OF MONEY IN YOUR LIFE?
Hello friends,
As we head into the holidays--especially Thanksgiving, I wanted to share with you a great lesson that can change the meaning of the holidays for you and your family, and possibly change the direction of your life. It has much more to do with what really matters in life--and is fundamental to shaping a financial plan that works for you.
YOUR LIFE VALUES SHOULD DETERMINE EVERY LIFE DECISION YOU MAKE
Let me cut to the chase. Your life values should determine every life decision you make. Money is great to have, but all the money in the world won't make you happy if what you do with it conflicts with your values. Ask yourself, is anything really more important to you and your family than your values? They can determine how hard you are willing to work to achieve your financial goals, how much money you currently spend and how much money you will need at retirement.
As you gather with your family and friends over the Thanksgiving holiday, it's a good time to talk about more than turkey. Make good use of the extra time together for some soul searching. Use this time together to discuss what truly matters most to you and your family. Only then, once you have a clear picture of what you value most in your life, will you be able to create a truly meaningful financial road map. Only once you determine the true purpose of money in your life and understand your values will you be able to build a financial plan that works for you and your family.
THE VALUES PROPOSITION
Okay, so you're wondering, David, where are you going with this values stuff? Well, I want you to create what I call a Value Circle. Here's how:
Have fun and be truthful. This is not a test. The goal is to be honest. Go with your gut, otherwise this won't really work.
Start with the simple question: What's really important to you? When you think about your life and the things that really matter, what value is most important to you? What's the purpose of money in your life?
Stay focused on values -- not goals, not things, not stuff to do or buy. Say you worry a lot about money, you might be tempted to list as a value "having a million dollars." But this is not a value; it's a goal. The underlying value in this case would probably be security or freedom. The million dollars is just a way to fulfill one of those values. When you think about your values, remember you're looking for basic aspirations like freedom, happiness and security. Simply put, values are about being; they define a way of life. Goals tend to be about doing and having; they involve stuff.
Money is good for three basic things -- it helps people: be, do, and have. When I say that money helps people be, I mean that it allows them to live in a particular way that defines who they are. When I say it helps people do, I mean that it makes it possible for them to take actions that will help create the kind of lives they think they want. Lastly, it helps people have -- it enables them to buy stuff.
Write down five core values that you can commit to over the next year. If you come up with more than five, that's alright too. You want to put them in a circle. Why? There's a starting point to a ring, but there is no ranking. You don't want to suggest that any one value is more important than any other. This also reflects the fact that if you don't put a fair amount of effort into all of your top values, your life can become unbalanced.
MISMATCH OR ON TARGET?
The big question once you know what matters most to you is: Does your financial behavior match your values? If your top value is family and you just bought an expensive new car that you're now working overtime to pay for, your values may be in conflict. Are you spending money in a way that brings you closer to or further away from your values and who you really are?
Or say you believe that helping others is important to you, yet you're too busy working to volunteer, and because you're overspending on "stuff" you might not even have the money to give to charity.
You see what I'm getting at? Many people talk the talk, but they aren't walking the walk.
FORGET THE HOLIDAY HOOPLA
Let's take the upcoming holiday season. It's a time of year when people often allow themselves to get caught up in a spending frenzy. When you add the tab for gifts, new clothes for parties, entertaining costs, and decorations, it can be far beyond what you can afford. The holidays should not be about money, but memories that will last a lifetime.
Instead, the holiday haze wears off and the shocking credit card bills arrive. What are you giving up by spending out of control? Quite a bit. Some people take the better part of the next year paying off those holiday bills. Meanwhile, that's money that could have gone toward building your savings, or investing, or your child's college education.
STAY TRUE TO YOURSELF
The point is, you shouldn't let the holidays or anything that's not in line with your values, rule the day. If you say family matters most, should you consider working less to honor that value, or switch to a job that will allow you to meet your financial obligations, but perhaps in a less demanding environment that allows you more flexibility?
If your actions are not in line with your values, you are not only likely to be unhappy, but I suspect your financial situation isn't as you would like either. Why? You probably aren't making the most of your money -- overspending on stuff that really doesn't have much to do with what's important to you, like that pricey house or that expensive car -- things that keep you tied to your desk all those hours, just to pay for them.
NOW TAKE ACTION
As you may know by now, I like to inspire action. It's not enough for you to reflect on your values, but to take that discovery, that knowledge and make it work for you.
Here's what I want you to do. For each value write a matching "do" ideas list. In other words, actions you need to take in order to bring the way you live more in harmony with your values. For example, if you say security is important to your family, and yet you don't have life insurance or a will, put that on your to-do list, and set a time frame for accomplishing that goal. (You can download my FREE Value Circle chapter from Smart Couples Finish Rich at http://www.finishrich.com/books/couples_chapter.php).
Now, go a step further and then write down matching "have" ideas -- that is specific material goals that living according to your values would allow you to achieve.
I know this seems painfully simple, but it's powerful. You know why? You'll start focusing on what really matters and concentrate less on having and more on being. Not only will you be happier, but more likely you'll be on the road to becoming rich, in every sense of the word. And, that is something you and your family can be thankful for!
Your friend,
David Bach
Founder, FinishRich Media
Copyright © 2005 FinishRich Media
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