How to Discover Your Money Story
Gaining Perspective on Your Money History and Values Helps You Better Articulate Your GoalsKathy Longo, CFP®, CAP®, CDFA Wednesday, 10 February 2021
The following article is based on the content covered in my book, Flourish Financially: Values, Transitions, and Big Conversations. If you’d like to read more, you may purchase a copy here.
We all have a money story. It’s the history of financial decisions and financial influences that define how we view finance today. It also represents the emotional attachments we have to money, which impact how we spend and save.
When you understand your own money story, it can remove some of the barriers that get in the way of allowing you to make level-headed financial decisions. You will always have emotions surrounding money, but if you can separate the emotional from the rational, you’ll more clearly identify your true goals and make better financial decisions.
Discovering Your Money Story
When prospective clients visit Flourish, we give them two surveys that are designed to help them start to understand their own money story. The first is a financial satisfaction survey and the second is a life transitions survey. The financial satisfaction survey is a twenty-point checklist that addresses everything from spending habits to debt level to investment choices. This provides perspective on how they currently feel about various aspects of their financial life. The life transitions survey, on the other hand, looks at marriage, death, retirement, and other key times when people look for financial guidance. Life transitions can be overwhelming, and they can affect how someone views or plans for the future. Understanding where you are regarding transitional periods will influence how you develop your future financial plans.
The third – and most critical piece – to discovering your money story, though, is all about values. It is only through truly understanding your own values that you can see the full picture of your money story. If you want to learn your own money story, this is a great place to start.
Step 1: Do a Values Check
Have you ever known someone who says they value their health, yet they never exercise and they constantly eat fast food? So many of us say we value one thing and then engage in activities that don’t support those values at all. In some situations, particularly when my clients are struggling to articulate their money values, I ask them to choose their top twenty or thirty values and then gradually refine that list to between five and seven. This helps me frame conversations and begin talking about the future. This helpful article from MindTools provides a long list of common values, which you can use to make and refine your own values list.
It’s possible that this exercise will be the first time you clarify your money values and really spend time thinking about what feels most important to you in the way you live and work. This is because no one challenges us about money. No one engages us or gives us an opportunity to consciously think about what our values are. For example, what does retirement mean to you? Retirement isn’t just a dollars-and-cents question; it’s a lifestyle question that is highly impacted by your values.
Step 2: Ask Yourself Substantive Questions
Once you’ve narrowed down your values, begin asking yourself substantive questions about each one. For example, “What does this value really mean to me?” Think about how you would explain it to someone else. This is important because everyone defines things like family, financial independence, open-mindedness, and diversity differently. For example, one person may feel financial independence means owning their own business and spending their days living out their passion, while someone else may feel it means having enough money to travel as much as they like. You see, without really looking at your values and getting to the root of what they mean to you, you can’t honestly articulate your goals.
A Note: When Values Collide
As you begin to dig into your values and get a greater understanding of your money story, you may find that sometimes your values compete against each other. This can be a tricky scenario, and it often requires a shift in your mindset in order to make sense of it all. In my own life, for instance, I was hesitant to leave my prior firm and start Flourish because my job provided financial security for me, which is one of my core values. However, when I examined the rest of my values, I decided to let my value of making a difference take precedence over financial security for a little while in the hope that the trade-off would eventually bring me greater financial independence and security.
Values and Your Family
Your money story is also highly influenced by your upbringing, and the values your parents or grandparents held with regard to money. To understand the impact your early life had on your money story, think back to your earliest money memory and any emotions that surround it for you. Then, think about how finances were viewed and discussed in your household. You will likely begin to see that your upbringing is still impacting how you view money in one way or another.
Although your family’s money values leave an imprint on you, it’s important that you not be completely influenced by them. This is another reason why clarifying your own values is important. They evolve and change over time, so it’s important to be sure you are living in a way that truly aligns with who you are now.
Taking the Next Step
Once you discover your own money story and gain clarity on your values, the next step is to ensure you are living them out. After all, knowing your values won’t serve you if the decisions you make don’t support them. You may find that it’s time to make changes, including with your financial plan.
If you’re interested in utilizing the surveys we offer here at Flourish, or you’d like to talk with someone about how to meet your financial and life goals, please contact us today. And, if you enjoyed this article, I encourage you to read my book, Flourish Financially, in which I go into even greater detail about identifying your money story and clarifying your values. You can also find weekly financial guidance and encouragement on the Flourish Financially Challenge podcast, including my episode entitled Your Money Story.
About the Author
Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.