If Something's Got to Give

Hi there.

If someone was to look at your last three bank statements, would they know with certainty what is most important to you? If your answer is, “I've never considered that,” then you're not alone. 

The biggest line item on my monthly budget is the mortgage. At first glance, it’s hard to make a case for how that fulfills a core value. But if we flip the script, and start with what’s important, it’s easier. 

“Values-based spending” is an exercise that I do with my clients. I help you identify what matters most to you before we ever talk about money. Questions like: “When you think about a life well lived, what matters most to you?” Or, “In the relationships and work that matter to you, what kind of person do you want to be?” These are difficult questions to answer truthfully. Not because we want to lie to ourselves, but because we often don’t know how we really feel. 

After answering those difficult questions, we identify three (and only three) values that reflect the responses. And trust me, there are a lot you could pick from. Limiting our list to three identifies the key drivers in our life today. Then we pull up the bank statements and hold them up against those three. On a scale of 1–10, how well does your spending reflect them? It's not a gotcha. It's an eye-opener.

“I want my life to have meaning, and that’s why I’m so intentional about the time I get to spend with my kiddos. I want them to always know they can count on me.” In one sentence I can see how Purpose, Family, and Dependability are key values for me today. That helps, because the mundane mortgage payment lands right between Family and Dependability. It's not just a bill anymore. 

Identifying our values can help us decide, ahead of time, how we rank our goals. That way, we have a clear path, and don’t have to rush to a decision in the midst of a financial crisis or a heated argument. That doesn’t mean lower-ranked goals get ignored. It means that when there isn't enough for all of them, you already know which one moves first, and which of the four options you'll reach for: Spend less. Earn more. Push a goal back. Drop a goal.

This exercise is especially valuable for couples who are coming to the table with unique value systems and totally different money stories. Let’s be honest, questions like: “What’s your first memory about money?” don’t come up very often on a first date. Let alone the 10-year wedding anniversary. 

So, what’re your three values?

Until next time, God Bless.

Ian