Making meaningful decisions about money can be complicated. Everyday concerns about bills, expenses and what’s coming next can distract us from making financial choices that truly reflect our intention and values.
Morning Consult partnered with Thrivent on a survey designed to understand how people prioritize their values in their financial decisions. The survey, conducted in June 2023, asked 2,500 adults about their personal values, financial decisions, and financial management tactics. Total respondent data from this survey has a margin of error of +/- 2%.
According to Thrivent’s 2023 Financial Crossroads Survey, the current environment — including mounting concerns over the economy, fear of recession and high levels of personal debt — has many Americans feeling like they must prioritize certain financial needs and make difficult choices. This potentially comes at the expense of their personal values and how they may otherwise prefer to use their money.
Thrivent’s survey revealed that if given the choice, Americans would prioritize:
• Taking a job working harder and longer hours to make and save more (53%) over making less, but having more free time to do what they love (47%)
• Saving for their children’s college (56%) over saving for their own retirement (44%)
• Investing bonus money for the future (73%) over splurging on a vacation (27%)
• Saving for their own retirement (75%) over funding their parents’ extended care (25%)
Despite these competing considerations, Americans would like to bring financial decisions closer to their values if they could. In fact, most Americans (65%) say their values are important to them when making financial decisions, yet 71% feel like their decisions only sometimes or rarely align with their values. According to the survey, Americans regard their family (76%), health and wellbeing (57%) and financial stability (39%) among their top three values, and it’s likely they want to prioritize money decisions with these themes in mind.
How can we bring our values into the fold?
Purpose-based financial advice can help. It looks at someone’s financial situation holistically, and helps them tie their values, goals and financial decisions all together to form a complete picture.
Five steps to align financial decisions to personal values.
1. Seek initial help: Adopting healthier budgeting, saving and spending habits is a critical first step. A money coach, like Thrivent’s complimentary Money Canvas program, can help people better understand their cash flow, manage spending and trim finances.
2. Develop financial goals that reflect values: Meeting with a financial advisor can help people explore and define their goals. This is an important relationship throughout life: a financial advisor is a key partner who can help people articulate their financial goals and integrate values into everyday financial decisions.
A good financial advisor will dig deep by asking thoughtful questions about financial priorities in the short- and long-term.
For example, they might ask someone: “Are there areas of your finances that you feel need immediate attention?”
Imagine it’s 10 years from now and you’re looking back at all that you accomplished – what do you see? Looking further into the future, what would make you look back and say you lived a great life? These questions go beyond a dollar amount and get to the heart by figuring out what resonates deeply with a person and their loved ones.
As a result, these questions unlock values. People may connect their responses back to things like family, faith and community, or even something more intangible like balance, growth or stability. This is a crucial part of financial planning that often gets missed, but it’s helpful in highlighting what matters most to people and tying it to their financial goals and decisions.
3. Integrate values into the financial picture: A financial advisor can help bring all the pieces together. For example, if someone said their values are “family” and education,” a financial advisor can match those to a concrete goal – like sending their child to college in 10 years – and then outline steps to achieve it. Perhaps it’s something small to start, like setting aside $50 per month in a 529 savings account to get a head start on college tuition. With the power of compound interest, that money could grow to a sizable amount in 10 years.
4. Have a written plan: Goals have more staying power if they’re written down on paper as part of a financial plan. It helps people evaluate their progress, celebrate successes and identify gaps. A financial advisor is an important accountability partner to help people stay on track and ensure their financial decisions continue to stay aligned with values.
5. Act on your goals: Once equipped with a plan, people can start to act on their goals. As they begin to see progress, they’ll also see their values at work through their everyday financial decisions. Small steps matter, and if they’re able to do that across every financial goal, the impact over time can be substantial and make a meaningful difference in their overall financial picture.
At Thrivent, we believe the financial advice journey should begin early to connect financial decisions to values. By working with a financial advisor, people can have thoughtful conversations about what matters most to them and start integrating their values, goals and financial strategy all together. This ensures values are always kept at the center, guiding their financial decisions in the short- and long-term.
This article was prepared by Thrivent for use by local financial professionals Rebecca Wise, 610-839-8955, and Bridgit Holly, 215-368-4888, both of 11 E. Philadelphia Ave., Boyertown; and John Lauer in Morgantown, 610-286-5986.