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Aligning your financial plan with your values

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Financial planning is about more than how much you can accumulate or how much income you can generate before and during retirement. It’s also about asking: What’s the point of it all?

What are you saving for, and what do you want that money and income to help you experience, protect, support, or accomplish?

Key Takeaways

  • Your values can serve as a filter for financial decisions. Articulating what matters most can make it easier to decide what to do with your money and why.
  • Values-based planning goes beyond values-based investing. It can influence everything from where you invest and spend, to the income you create for retirement and the causes you support.
  • Your plan can evolve as your life does. A financial professional can help you look at your existing plan through a values-based lens so you can make adjustments to match your current priorities.

What is values-based financial planning?

In recent years, values-based investing has become a popular topic, and it’s important to note this distinction:

Values-based investing specifically focuses on choosing individual stocks, funds, or assets that match your ethical, political, or environmental beliefs. While values-based financial planning organizes your overall spending, saving, and life goals around what matters most to you at a deeper level.

Have you asked this important question?

Financial planning often starts with numbers: How much should you save? What return do you need? How much money will you need to retire?

Those questions matter. But there’s another one worth asking as well:

What’s your why?

Maybe saving enough for retirement means having the freedom to spend more time with family. Perhaps financial security means being able to enjoy each day without constantly worrying about market swings. You might want to travel, help your children, support organizations you care about, or leave something meaningful behind.

Values-based financial planning connects those bigger priorities to the financial decisions you make along the way.

This type of planning has gained particular interest among women and “next gen,” who often place emphasis on aligning their money with their beliefs and priorities. But it isn’t limited to any one demographic.

Values-based planning can be a viable approach for anyone who wants to put more purpose behind their portfolio as they pursue their financial goals.

How to identify your core values

Your values are the priorities and beliefs that matter to you at a deep level. They aren’t necessarily financial goals themselves. Instead, they can help explain why certain goals matter.
Start by asking yourself a few questions:
  • Think about a time when you felt especially content or most like yourself. What was present in your life? Was it family, freedom, stability, adventure, community, purpose, or something else?
  • What would be worth stretching beyond your comfort zone—or even having a little less money—to preserve or achieve?
  • If the people closest to you described what is truly important to you, what would you hope they mentioned?

You might identify values such as security, independence, equality, family, freedom, generosity, community, faith, experiences, achievement, simplicity, well-being, or legacy.

Try narrowing the list to three to five priorities. These then become a filter for the financial choices you make.

How to turn personal values into financial goals

A value becomes more useful when you connect it to something tangible. 

If family is one of your values, saving may represent more than watching an account balance grow. It could mean helping your children with education, caring for an aging parent, taking an annual family vacation, or creating greater financial stability for the people you love.
If you value freedom, your goal may be to build enough financial independence to retire earlier, change careers, or simply have more control over your time.
If generosity matters, charitable giving might become a defined part of your financial plan instead of something you do only when there happens to be money left over.
And if you value financial security, part of your retirement strategy might focus on creating reliable income that isn’t dependent on day-to-day market performance.

That’s where financial decisions can take on more meaning. Putting money into an annuity, for example, isn’t simply about purchasing a financial product. For someone who deeply values security, freedom, or enjoying retirement without as much concern about market volatility, guaranteed lifetime income may help support the kind of life that person wants to live.

You don’t have to choose between values and financial progress

Think of values-based planning as “voting with your dollars”—while still considering your financial goals.

Values-based planning doesn’t necessarily mean choosing your principles instead of financial gain. The goal is to look for ways your money can do both: help support the future you’re building while reflecting what’s important to you.

Find a financial professional who understands what matters to you

Your financial plan isn’t created in a vacuum. The people and organizations you work with can influence the decisions you make for years.

So, part of aligning your financial plans with your values may include “vetting” the people and companies you work with.

That doesn’t mean your financial professional needs to share every personal belief you hold. What matters is whether they take the time to understand what is important to you and incorporate those priorities into your plan.

Consider asking yourself:

Does my financial professional know what I truly want to accomplish with my financial resources beyond just reaching a certain number?

You can also consider the reputation, priorities, and business practices of the financial companies you choose to work with and whether those relationships feel consistent with your values.

Does a values-based financial plan ever change?

Your deepest values may stay relatively consistent, but the way they show up in your financial life can change over time. Valuing family at 35 could mean saving for children’s education. At 65, it might mean helping adult children, spending more time together, or planning the legacy you hope to leave.

Major life events can also shift your priorities.

You don’t need to rebuild your financial plan every time something changes. Instead, periodically revisit it with your financial professional and ask whether the choices you’re making match your evolving priorities.

Because a money goal isn’t simply to accumulate more…

The goal of a financial plan is to make sure the money you’re saving, investing, and eventually using is helping you build, and live, the life you envision.

Passing your values to the next generation

A financial legacy can include more than the assets you leave behind. Families also pass down attitudes about money, personal stories, lessons learned, and beliefs about what wealth is ultimately for.

A legacy charter can help put those ideas into words. This personal document captures the values, experiences, intentions, and financial lessons you want future generations to understand. It might explain why supporting certain causes mattered to you, why you made financial security a priority, or why creating memories with family was as important as building an inheritance.

Putting your values into practice

The same values you hope to pass on can also help shape the financial decisions you make today.

For some people, one of the most important values a financial plan can support is security—specifically, knowing that essential expenses can be covered throughout retirement.

One way to put that value into practice may be to build an income floor from sources that provide steady, monthly income such as Social Security, a pension, and annuities.

Put Your Values Into Action

Your financial plan can reflect what matters most to you. If retirement security is one of your priorities, learn how an income floor can help support that goal.

Build greater retirement security
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