We create our beliefs and values through our childhood money moments, and reinforce them as adults by our behaviours and habits.
Our financial decisions are never just about money; they are always based on our values. Your money values are neither good nor bad, but it’s important to know them so you can align them with your future decisions.
For example, you might drive exactly the same model of car as somebody else, but you would have each bought the car for different reasons. Those reasons are driven by your values – such as:
• Freedom: You can go to more places.
• Adventure: You can go to new, exciting places.
• Independence: You’re no longer relying on other people.
• Safety and Security: Your new car won’t break down and leave you alone and stranded.
• Family: You can take your family where they need to go.
• Status: You want a car that shows off your status to other people.
• Achievement: You deserve this because of what you have achieved.
All of these reasons are valid, and none are better or worse than the others. However, sometimes you make decisions that aren’t aligned with your values.
When buying your latest car you might have wanted the sporty new car because you feel you deserved it (value: Achievement), but let yourself get talked into buying the family sedan because it was more suitable for your children (value: Family). This is not to say you don’t care about your family. But it might mean you are doing everything for your family, and nothing at all for yourself.
Conflicts such as this occur because we don’t make decisions on values alone, we have the underlying emotions of needs, wants, and shoulds at play in the background.
1. Do you feel guilty about spending money on something? You probably don’t need it, but somebody else (it might even be a voice in your head from your past) is influencing your decision.
2. Do you feel disappointed or ashamed of yourself for having made a wrong decision?
You might have made a “should” decision rather than being guided by your values.
3. Do you generally feel anxious or deprived?
This is probably a true needs issue.
Your goal is to align your behaviour with your values.
Needs, Wants and Shoulds
The needs, wants, and shoulds in your life often work against your values:
• Needs: These are the essentials you need to survive (at a reasonable standard of living), such as food, housing, and clothing. These also include some expenses related to your job (because your job fuels your ability to pay for the basics), such as transportation to and from work and health care coverage to keep you well enough to go to work.
• Wants: These are the non-essential “nice to have” items, such as eating out, going to movies, expensive clothes, and getting the latest iPhone.
• Shoulds: These are inauthentic values we carry over from childhood. They feel like obligations (needs), but are imposed by someone else’s standards: our parents, caregivers, teachers, or other authority figures.
To identify your Needs, Wants and Shoulds, on a blank sheet of paper, draw a vertical line down the middle, and list your Needs on the left and Wants on the right.
Then examine the items in the Needs column to check whether any of them are Shoulds (Do you really need to spend money extending the house, or is that just a way of proving your father wrong when he said you would never be well-off?) Move any Shoulds into the Wants column, or remove them altogether if they don’t serve you.
When you separate your needs from your wants, you can then choose to spend money first on your needs. Knowing this difference is an important part of learning to manage money, especially in tough economic times.
Commit to asking yourself this question before you buy something from this point on:
“Do I really need this or do I just want it?”
You may be surprised at how many things are actually Wants! Cross off the Wants that are the least important to you, and highlight those that are particularly important.
This affirms that you can still spend money on your Wants, but you’re doing it consciously, and only after you have met your Needs.