When creating a financial plan, it's essential to start with getting clear on your values. What does that mean? It means you are beginning with the foundation of what makes you "YOU." When it comes to money, we all have our way of dealing with it. It has been said, "Personal finance is more personal than it is finance." Everybody has a unique first memory of money. Everybody has a unique style when handling their money because of their upbringing and life experiences. Everyone thinks about money in their way, which then impacts how they deal with it.  So, it's crucial to spend time thinking about what money means to you and why it's important to you. Your values will be the driver of your goals, which drives your action items within your financial plan. 

If you have a spouse, getting clear on why money matters to both of you is a huge opportunity to create greater marital unity. When your partner hears what money means to you and vice versa, it allows you to better understand each other. Often we think we know what our partner values when it comes to money, but hearing them say it in a focused conversation usually improves the relationship. 

Why do we need to start with clarifying money's importance? Why can't we get right into doing stuff, investing, setting up accounts, moving money around, etc.? These are fair questions. As someone biased towards taking action, I can relate. We have to start by addressing why money matters to you because this dictates which goals to prioritize. Suppose we know why issues of money matters to you, then we can compare your goals to see if they are compatible. We can use your values to check our work to make sure everything we're doing to get you to where you want to go aligns with what matters to you in the end. Your values become a "True North" for the entire plan. 

Getting clear on your values, seeing them in writing, and referring back to them often also act as motivators. When you can read what matters most to you when it comes to your money, it reminds you why you're working so hard. Your values, when thoroughly expressed, become the inspiration for striving towards your personal goals and aspirations.

I always start my financial planning engagements with an exercise clarifying why money matters to you. I facilitate the conversation and guide you (and your spouse) by uncovering the highest and most important things to you. We do this together. At the end of the exercise, you'll have a document that you can reference. It will remind you what truly matters to you and why.

Eric Maldonado, CFP®, MBA

eric@aquilawealth.com

(805)250-4552

www.aquilawealth.com

872 Higeura St, San Luis Obispo, CA

Photo by Min An