Personal values can be thought of as a whole as an internal measurement. This standard, which you use to judge whether or not you’re a successful person, is based on what you think is significant in life. Honesty, authority, popularity, elegance, devotion, serenity, and joy are common values. In this post, you will learn the importance of financial values, as well as several examples to assist you understand them.
What are Financial Values?
Similarly, financial values might be compared collectively to a measuring stick. However, this measurement is built on your money beliefs. A financial value system contains your attitudes about debt, saving, investing, spending, and earning money.
Personal values are often founded in financial ideals. A person who values quick satisfaction, for example, may be more comfortable with debt than someone who values stability.
Answering the Following Questions Will Give You an Idea of How You Feel About Financial Values:
- Do you prefer to rent or buy a home?
- Would you rather incur debt or buy a car altogether if you were to purchase one?
- Would you be willing to take a minimum-wage job temporarily if you needed money right away, or would you wait for a better opportunity?
- Would you go over your budget to buy something you truly loved in a store, or would you wait until you had saved enough to acquire something similar?
- Would you rather pay a professional to solve a plumbing problem or try to fix it yourself?
Why Should You Care About Financial Values?
According to a Forbes article published in 2018, 44% of Americans do not have enough cash to handle a $400 emergency; 43% of student loan borrowers are not making payments; 38% of U.S. households have an average credit card debt of $16,048; and 33% of American adults have no retirement savings. As per recent Bankrate research, 78 percent of American adults are unable to sleep due to financial concerns.
According to the data, a significant number of people do not have sufficient financial security to maintain the quality of life that they consider important. If you want to understand and appreciate your current financial lifestyle, you should seriously consider creating a budget.
So, what exactly is the answer? Excellent habits lead to financial security, and strong values lead to good habits. Both of these things are directly related to each other.
How to Define Your Own Values?
You can start by writing down your top five personal values and the corresponding financial value for each. Consider the following scenarios:
Example # 1
It’s vital to me to spend time with my grandchildren and to be able to buy them Christmas and birthday gifts (Personal Value)
As a result, it’s essential for me to save for my retirement above my minimum living expenditures (Corresponding Financial Value)
Example # 2
I value my creativity and self-expression, thus I want to be able to design and live in my own home as soon as possible (Personal Value)
As a consequence, it’s important for me to keep my credit score above average and to be prepared to manage recurring debt, such as a mortgage (Corresponding Financial Value)
If you want to go even further with this, Smart About Money’s “LifeValues” course teaches how to create strong financial values. The course includes a 20-question quiz to help you evaluate your financial decisions. Your results represent your personal values. Other themes include “How to Use Your Life Values,” “Break the Family Values Cycle,” “Life Values for Spouses and Partners,” and “Life Values for Financial Educators.”
Important Takeaways
- Personal values are what you consider to be significant in life and the standard by which you judge your achievement.
- Your financial values are your money beliefs.
- Strong and well-defined personal and financial values can lead to good money habits.
- Good financial precises enable you to maintain the lifestyle you value.
2 thoughts on “The Importance of Financial Values”