The holiday season often pushes us to take time for gratitude in many areas of our lives. There’s more time spent with family and friends. There are more opportunities to take time to truly think about the things in life that you’re grateful for.
One of the biggest ways to incorporate values and gratitude into your finances is to give back. Charitable giving is a big part of values-based spending, and the beautiful thing is that you get to decide what that means for you! Find charities, organizations, or local causes you care about, and set aside a percentage of your after-tax salary to give.
But don’t think you have to only give to charitable organizations. Give wherever your heart is. For some people, that might be their alma mater. For others, it could be their home church. It might even be your local parks and recreation department, child’s school, or a nearby humane society.
Taking this a step further, you might decide that you want your “giving” money to be given to friends or family who need it. Helping your adult children pay back a portion of their student loans as an unexpected gift, or gifting a sum of money to help pay for your grandchild to go to an expensive but exciting space camp next summer may be the most comfortable and fulfilling way for you to express your generosity.
A Values-Based Budget
I often ask my clients what they want their retirement to look like.
Too often, we focus on financial goals that are relatively arbitrary. “How much do I need to save for retirement?” becomes an irrelevant question when you may or may not want to retire at all. And shooting for an arbitrary savings goal won’t necessarily help you achieve a specific retirement vision – whether that’s starting an encore career, or moving toward a retirement with big goals like travel or moving to a new state, or country.
Whether you’re a pre-retiree, or you’re already in the thick of retirement, building a budget that reflects your lifestyle and your values is a surefire way to find fulfillment with your finances.
This might mean that you spend less money on a house payment after downsizing, and more on annual trips with your grandkids. It might mean reducing the amount you spend each month on eating out, and increasing the amount you’ve allocated for your newfound love of rock collecting. Whatever you value, adjust your budget accordingly. Spend more on things/experiences you care about, and less on things you don’t – even if that means making big changes to your lifestyle before, during, and after the retirement transition.
Socially Responsible Investing (Impact Investing)
Your values don’t just have to be reflected in your day-to-day spending, or your annual charitable donations. You can structure your investment strategy based on your values, as well. Socially Responsible Investing (SRI), or Impact Investing, are similar investment strategies that essentially boil down to the same concept – you want the money you’re investing to grow toward your own personal goals of retirement while still supporting organizations that have the same values as you do, or businesses who are actively doing good in the world.
The truth is, your money is just that – yours. Even when you’re investing it and expecting a return, you get to dictate where your money is going. While SRI or Impact Investing were both less-practiced investment strategies even just a few years ago, there are now many more options available to investors as the concepts have become increasingly popular.
Think About Your Income
Are you earning income in a way that matches your values? That’s often a tough question to answer. I don’t want to berate you if you’re doing a job you don’t love – we’ve all been there. However, the more you can build a career that earns you the money you need to pay the bills and achieve your goals and matches your values – the more fulfilled you’re going to be.
For example, I run a fee-only, fiduciary financial planning practice. I value helping people, and I want to guide them through how to financially live their best lives. As a fee-only advisor, I don’t accept commissions, and I’m only paid by my clients – which ensures that they’re getting advice that’s 100% in their best interest. Because I don’t mind being honest with you, I can tell you this: there are other ways that advisors make money. Namely, some advisors who are commission-based or fee-based (part fee, part commission), receive money from insurance companies or organizations that sell financial products to sell those products.
That business model goes against my particular value set, so I don’t do business that way. In other words, the way I’m earning income supports my value system, and that creates space for me to feel especially grateful for my clients and the work I do.
Slow Down and Reflect
As we near the end of the year, I want to encourage you to take time to slow down and reflect on your financial life. We should be doing this regardless of the season, but during Thanksgiving I find that it’s especially important. What accomplishments have you had in the past year? What “wins” have you let pass by without celebrating? What do you have to be grateful for?
We get so caught up kicking ourselves over every small mistake we’ve made. I can’t tell you how many times I’ve had to stop a client as they’ve gotten on themselves for overspending on morning lattes, or missing a short-term savings goal. It’s important to evaluate why you fell off the proverbial financial wagon, but dwelling on the negative often blinds us to the fact that we have so much more than we truly need.
We focus on what’s gone wrong, and we forget to be grateful for everything that’s gone so incredibly right. So, as we enter Thanksgiving week, I want to know – are you using your wealth in a way that lines up with your values? That, in itself, is a wonderful privilege to be grateful for; and, even beyond that – what else has happened this past year that’s worth celebrating? What are you thankful for?