What Your Budget Says About Your Values
By Michael Vaughn, CFP®
For where your treasure is, there your heart will be also.
Matthew 6:21 (NIV)
These are some of the most well-known words that Jesus ever uttered regarding money. Your money and your heart are travel companions. What you value (where your heart is) is where you will put your financial resources.
If that is true, what does your budget say about your values? If we aren’t careful, our spending habits could unintentionally reflect different values than those that we profess. Take a moment to reflect on what your treasure’s current location says about your heart.
Are You Organized?
Do you even have a budget? If you’re going to take personal stock of Jesus’ words, then you need to know where your treasure is in the first place. A good budget will show you how much money you have coming in and where it is going each month. If you don’t know those two things, then organization may not be one of your top values.
Gather your credit card and bank statements from the past few months and take stock. How much money are you putting toward cars and transportation? How much money is going toward your house each month? How much do you give away? How much do you spend on vacations each year?
You can get a rough idea of how you’re spending your money by looking at past statements. However, just looking at a couple of months of expenses can cause you to miss some big things, like an annual vacation or major car repairs. It would be best to start tracking your income and expenses each month as a regular practice so that you can see how your spending evens out over the course of a year. There are many great tools available online to help you do so.
Are Your Values Clearly Defined?
Have you ever taken the time to stop and define what your values actually are? Most people haven’t. Take a moment a prioritize the following spending values:
- Minimizing debt
- Charitable giving
- Gift giving
- Protecting your family
- Saving for the future
If you’re married, it’s not enough for you to just define your values. You and your spouse both need to search your own hearts to determine your personal values, and then come together to establish values as a couple. You may have different priorities initially, but you will need to learn to work together as a cohesive family unit. Compromise may be required in order to establish family values that both of you can buy into and fully support.
What Does Your Budget Value?
Once you have a budget and a prioritized list of values, it’s time for a comparison. Are the two in alignment?
You may say that education is more important than travel, but if you’re only putting $100 a month into your children’s 529 educational savings accounts and spending $10,000 a year on travel, then that’s not really accurate. Your spending habits show that you value travel more than education.
Or perhaps you say that you don’t believe in debt and that’s a top priority. Are you aggressively paying down your mortgage? Or is the extra mortgage payment just what’s left over after you’ve spent all you want going out to eat and having fun?
Just because you don’t like debt doesn’t mean you can’t ever step foot in a restaurant. The key is to find a balance that truly reflects your stated values. Placing a high value on saving for retirement doesn’t mean you have to put all of your money into your 401(k); it just means that you should make sure to get your 15% in at the beginning of the month before you go shopping for new clothes.
How I Can Help
It can be difficult to reconcile your values and your budget in the most efficient way. There are so many different financial products and investment opportunities out there that it’s hard to know which ones are best for you considering your own unique values.
If you would like help getting started with a budget or how to effectively manage your budget, I would love to help you. Schedule your meeting by emailing me at [email protected], calling (417) 351-2942, or using my online calendar.
Michael Vaughn is a Certified Financial Planner™ (CFP®) and Vice President at Pinnacle Financial Advisors (PFA) with 20 years of industry experience. Before joining the PFA family, he served clients with investment management and retirement planning at The Mutual Fund Store for 14 years. Michael graduated from Missouri State University with a bachelor’s degree in business administration and management and earned his CFP® designation in 2004. He also served 20 years in the Missouri National Guard, retiring in 2007 as a Major. He currently volunteers on the board of directors for Good Dads and Fellowship of Christian Athletes. He and his family attend Hill City Church, where he serves as an elder. Michael is married to Lori and they have two daughters. To learn more about Michael, connect with him on LinkedIn.