Let’s talk about money differently, not like most do by throwing words like “budgeting,” “sacrifice,” and “cutbacks.” We are flipping the script to talk about aligning what truly matters with every dollar you spend.
What Is the Value Exercise?
Think of the value exercise as a financial reflection. Unlike budgeting, it helps you determine where your spending reflects your values and interests.
If you feel like your paycheck disappears into thin air with nothing meaningful to show for it, the value exercise is for you.
Here’s what this means:
● List your top values. Answer this question, “What matters most to me?” Is it family, education, travel, or giving back?
● Determine how you spend most of your time and money. Do you spend these resources on your top values?
● Adjust your spending. If not, allocate more time and money to those values.
Your Finances Should Support Your Values
Many of us think of money as the dollars to pay bills and save for the future. The financial choices you make can strengthen what truly matters to you.
● If you value family, are you spending in experiences that bolster your relationship with them?
● If you’re mostly for personal growth, are you setting aside more money for learning from books, courses, or mentorship?
● If travel is your big thing, does your budget reflect it, or have you added it to the “someday” category?
With the value exercise, you make spending intentional, not accidental.
Aligning Your Goals With Spending Decisions
When your finances align with your values, you intentionally design your life. Retirement planning becomes a way to create the future you love.
For example, if giving back is important, consider strategies like:
● Donor-advised funds (DAFs): These let you contribute money now, get a tax deduction, and support charities over time.
● IRA qualified charitable distributions (QCDs): If you’re over 70½, you can donate directly from your IRA to a charity, which may lower your taxable income.
● Naming beneficiaries: Whether for family or charity, set up your accounts to reflect your values to make sure your money continues to support what interests you the most.
The biggest perk of aligning your finances with your values is that you’ll feel more in control and at peace with your choices.
Conclusion
The value exercise changes the way you look at retirement planning. Your focus shifts from budgeting to what you value the most. That’s where you spend the bulk of your time and money.
To benefit from the value exercise, take a moment to reflect. What do you truly value? Where does your money go? What small changes can you make today to build a future that reflects what really matters to you?