Why Is Money Important To You? To Me?
Fee-for-service financial planner and founder of PlanEasy.ca
Money is important. No doubt about it. Without money you couldn’t buy food, or buy clothes, or put a roof over your head. Obviously, we all need some money to survive. But have you ever stopped to think about why money is important to you?
Once those basic survival needs are taken care of, things become a little more interesting; suddenly the importance of money changes from person to person.
Have you ever been amazed by what other people spend their extra money on? How much they spend on certain activities, hobbies, toys, or vacations?
Or perhaps you’ve been questioned on your spending decisions by a friend, a co-worker, or maybe even a partner?!?
It’s easy to forget that we all value things differently and that we make spending choices accordingly.
Why money is important to me could be very different from why money is important to you. Even between partners there can be confusion and frustration about why money is important.
At the end of the post I’ll share with you my financial values. You’ll have the opportunity to find out what your financial values are too!
Spend Money On What You Value
Over the years I’ve seen lots of different spending decisions and still I get caught off guard sometimes.
Despite all that experience, I’m still amazed when someone decides to spend nearly 50% of their disposable income on clothes. Or when they spend $20,000+ on luxury travel each year. Or drop $300-$400 eating out each week.
What I find even more amazing are the trade-offs these people make to afford those things. They clearly understand why money is important to them and are willing to make sacrifices in other areas of their budget.
What these people have in common is that they really value one specific thing and they make spending decisions accordingly.
Financial values can differ greatly from person to person. We all value things differently and it clearly shows in the way we choose to spend our money.
When Spending And Values Are Disconnected
Most of the time there is a strong connection between spending and values but sometimes there can be a small disconnect.
When values and spending don’t align, an easy budgeting ‘win’ can be to cut back on something you don’t value highly. When you make this small cut back, you hardly notice there’s been a change at all.
Knowing what you value and what you don’t can help you evaluate your spending and re-organize your budget to better align with your financial values.
When spending and values are aligned you’ll be more content with your budget and your spending decisions.
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“Why is money important to you? To me? To everyone?”
Freedom, security and time are my financial values.
My top value is freedom. To me freedom means having choice. The choice to do something, to buy something, to take a risk, etc.
Security is also important to me. I don’t want to feel financial stress. I want to feel secure. For me this means having an emergency fund, absolutely zero debt, and a relatively conservative investment portfolio (for my age anyway).
Time is another important value for me. I’ll spend money to gain time. Time with family and friends. Time with my children after they were born. Time to work on my personal projects.
The things I value least are the places I save money. I don’t put a lot of value in symbols of status or success. I probably spend less on these categories than the average person.
One thing I find interesting is how low I ranked comfort. I’m definitely willing to go through a bit of discomfort to save money. Biking to work falls into this category. Sometimes it can be very uncomfortable but the money I save lets me spend more on the things I value.
When we look at the most common financial values responses we see that a few categories are clearly more important.
Freedom, comfort and security often rank highly for people. These are basic needs that we all have so I understand why it’s commonly ranked as the most important financial value.
Interestingly, wellbeing is one of the least important values for many people. This is something I also rank lower on the values scale but perhaps it’s something we should all be willing to spend more money on.
Take the quiz below to find out how your financial values compare to everyone’s values.
Financial planner, personal finance geek and founder of PlanEasy.