How to Make Financial Decisions That Reflect Your Values

When it comes to money matters, you may think it’s all about using your head—crunching numbers, analyzing spreadsheets to figure out how much you have, and calculating what you need to reach your financial goals. But shouldn't your financial decisions also be based on your heart—your feelings and emotions, the things that you value and are important to you? By definition, values represent our unique, individual essence. Values highlight what each of us stands for, and they can drive our behavior and choices.

According to Thrivent's recent 2023 Financial Crossroads Survey*, Americans feel like they have to sacrifice the values that matter the most to achieve other important financial goals. These findings reveal that this disparity is driven by concerns of the economy, fear of recession and high levels of personal debt. While many survey respondents agreed that values are important, they feel unsure how to base important financial decisions on them.

Why Values and Financial Decisions May Conflict

The Financial Crossroads Survey found that Americans often prioritize certain financial needs, potentially at the expense of their personal values and how they may otherwise prefer to use their money.

Let’s say that a couple of your core values are service and generosity. Perhaps you dream about organizing a community food pantry for the homeless, but most of your paycheck is gone after paying monthly bills and household expenses. Or maybe your top value is family. Perhaps you want to save for your children’s future college expenses but worry that it would be at the expense of your own retirement savings.

These examples of conflicts between head and heart have a common source: uncertainty around personal financial situations. Such conflicts may keep you from doing what matters most because you may think you can’t afford to. But it doesn’t have to.

“Many people expect this period of financial uncertainty to continue, and their fears could be getting in the way of making financial decisions that reflect their intention and values,” said Loren Hansen, vice president of Thrivent Advisor Groups. “Increasingly, we’re seeing a need for purpose-based financial advice that helps people manage their money in the present and allows them to consistently connect those decisions to their main purpose and guiding values.”

3 Steps to Help You Identify Your Core Values

What does aligning your goals with your values look like? It’s different for everyone. The only way to know what it means to you is by digging deep to understand and name the values that mean the most to you and your loved ones.

Step 1: Self-reflection.

Ask yourself questions like these; write down your answers or talk them through with a loved one.

• What's important to you? Has it always been important to you?
• What would make you reflect and say you’ve lived a great life?
• What drives your decisions and your desires? Think about times when you’ve made difficult choices; what ultimately mattered most?
• Think back on key moments and important accomplishments in your life. What brings you the most joy?
• Think about people you love or admire and the values they demonstrate. Do you share those values?

Step 2: Make a list of your top values.

Based on your answers to the questions above, make a list of your values and identify the top three to five.

Common values may include things like:

• Family
• Faith
• Health & well-being
• Financial stability & security
• Service, community involvement & helping others
• Meaningful friendships
• Balance
• Meaningful work 

Step 3: Have a conversation.

Discuss your list with someone who knows you well. Do they see anything you missed? If you have a partner or spouse, include them in the discussion. That way, you’re on the same page and can make the best decisions for you and your family.

How Financial Decisions Can Align with Your Values

Depending on the values you’ve identified as being most important to you, here are some ideas for setting financial decisions that connect to those values.

If your values include family, security, or caring for loved ones:

Family is a top value for 75% of the Financial Crossroads Survey respondents. Protecting your family’s financial future should be reflected in your financial plan, both in the short term and long term. Your plan could include things like:

• Saving for big goals like a home, car or family vacation that can bring your family joy and fulfillment in the near-term.
• Life insurance to protect your loved ones from having to make major lifestyle changes if the unthinkable happens.
• An estate strategy that provides your loved ones with the freedom to pursue their dreams with the comfort of financial security.

If your values include financial stability:

Financial stability was a top value for 40% of overall respondents, and more pressing for Millennials and Gen X (42%) versus Gen Z or Baby Boomers (38%). If this is one of your top values, here are things to consider:

• Creating an emergency fund that will provide a safety net to help relieve your family of financial stress.
• Protecting your income with disability insurance that pays a portion of your paycheck if you become sick or injured and can’t work and would otherwise need to live on less income.
• Preparing for the retirement you envisioned so you can enter it with confidence that your money will last.
• An investment strategy aligned with your goals and risk tolerance to build assets in a way that furthers your financial stability—now and in the future.

If your values include faith, community involvement & caring for the less fortunate:

Faith was a top value for 39% of respondents overall. More value was placed on it by Gen X (43%) and Baby Boomers (46%). Ideas to consider:

• A monthly budget that includes tithing or charitable giving.
• Getting the whole family involved in giving back to help inspire their generosity.
• Including generosity in your financial plan with:
  • Donor-advised funds that offer a simple way to support your favorite charities.
  • A charitable trust and other offerings from an organization such as Thrivent Charitable Impact & Investing.

Stay Accountable by Setting Goals for Actions You'd Like to Make

Now that you’ve decided what’s most important to you, you’re ready to bring it all together—by writing down financial decisions you'd like to make and how they connect to your values. Start by setting goals around how you will get there. A time-tested approach to goal setting is the SMART framework.

SMART is an acronym for the 5 specific steps to creating meaningful & actionable goals

S: Specific
Your goals need to be specific. “I want to save $30,000 for a down payment on a home.”

M: Measurable
Your goals should be measurable. "I will transfer $500 per month into a dedicated savings account.”

A: Achievable
The goals have to be achievable, including realistic targets and a contingency plan if something gets in your way. "If unexpected expenses throw me off track, I will make up the difference in future months and consider gig work to supplement my income.”

R: Relevant
They must be relevant to what matters most to you, i.e., your values. "Owning a home will provide joy, security and generational wealth for my family.”

T: Time-bound
Finally, your goals have to be time-bound. "I will reach my goal in five years.”

How to Stay Accountable to Your SMART Goals

Another helpful tip is to have an accountability partner who will hold you responsible for sticking with your plan. This partner can be a:

• Family member or friend who understands what you’re trying to achieve and will be supportive when you run into barriers—or just need someone to keep you on track.
• Coach, like those available through Money Canvas—a free one-on-one money coaching program that empowers people to build healthier financial habits.
• Financial advisor, one who has the knowledge and expertise to help you get the guidance and financial clarity you need to put your plans into motion and your faith into action.

Let Our Professionals Help You Align Your Finances with Your Values

When it comes to getting guidance from a professional, 66% of people in the Financial Crossroads Survey say talking with a financial advisor, having a written plan, and seeking advice in a virtual setting would help them align their values to their financial strategy. A documented financial strategy that’s reviewed regularly can help people get the most from their money in a way that keeps their values at the forefront instead of at the margins.

The bottom line: Talk to a Thrivent financial advisor who can guide you and help you reach your goals for the future by following your heart today

Featured photo credit: ©Thrivent.com

*Methodology: 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%.
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