Wealth Decision #10: Know Your Money Values

The Wealth Decisions Podcast: Wealth Decision #10- Know Your Money Values Transcript

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George Lorimer once said, it's good to have money and the things that money can buy, but it's good too to check up once in a while and make sure that you haven't lost the things that money can't buy.

You know, to some, money represents security, stability, and providing a means maybe to cover your essential needs and expected expenses.

But for others, it symbolizes more of financial freedom and the ability maybe to pursue their passions and interests.

In this week's episode, we're going to be talking about a crucial wealth decision that maybe not many of us really think about much, but I think it's essential to understand so you can get a better handle of your finances.

Today's episode, Wealth Decision Number 10 is Know Your Money Values.

You know, we all have established some sort of values in our life, personal values, spiritual values, health and relationship values.

But not many of us have really thought about what our money values are and what they should be to achieve our financial goals.

So the big question I'd like to ask today is what is money to you and what are your money values?

This episode is for anyone who feels like maybe they've been living paycheck to paycheck or want to establish a true budget that balances living for today with saving for the future.

But it's also for those that want to achieve financial freedom, by finding a way to save even more than they're currently saving.

So let's talk about money for a little bit.

And let me bring it back to that same question.

What does money mean to you?

What are your personal money values and beliefs?

It's a big question, but an important one to consider.

If you want to know your money values, and maybe you don't have them written down somewhere, but if you want to know your money values, the best place to look is your bank statements and your credit card statements.

You know, when I meet with prospective clients, I always ask to see their financial statements.

I'll ask to see their 401k balances, what they have in IRAs and Roth IRAs, what their saving rate is, things like that.

I don't ask to see their bank statements, but if I were to look at your bank statements, I could figure out by looking at your expenses over the last three to six months, I could determine within 30 minutes what is important to you.

For instance, if you spend thousands per month on designer goods, I could determine that image is important to you.

If your car payment is over a thousand dollars per month, I could determine that you either have a really big family and need a big rig, or you like the idea of having a higher end vehicle because it gives you a sense of prestige or maybe a feeling of success.

If I saw a lot of Starbucks lattes every day for $5.50, I could determine that, number one, you're probably not getting enough sleep, or you just love coffee so much that you're willing to spend nearly $200 a month on a latte.

If you have over $15,000 on your credit card from travel expenses over the past six months, it's safe to say that experiences are important for you and your family.

But if you hold a balance of $15,000 or more, then you're just vacationing on credit.

If your mortgage payment is over 35% of your gross income, I could determine that a nice house is important, even at the expense of your ability to save or have a safety net.

We are all consumers.

We all like things.

But we all have different money values.

You know, being rich with things means your happiness swings, meaning that most things give us temporary happiness.

You know, the government of Bhutan measures the success of their economy by GNH rather than GDP.

GNH is gross national happiness.

So ask yourself how happy all the things you spend money on makes you feel.

You know, I'm all about living for today and having nice things and creating experiences, but not at the expense of my financial future.

So if you want to save more for the future and have some financial peace of mind, you really need to look at where you're spending money and make some decisions on what can be removed or what you can dial back on so that you have more money to save for the future by balancing experiences and the things you want to do today.

I've read a lot of self-development books over the years, and I'd often hear someone say, if you want a predictor of your future, look to your actions.

Your actions speak volumes, and your actions will dictate what happens to your wealth in the future, your health in the future, your relationships in the future, and your family life in the future.

There is often a disconnect between what we want or what we think we want and what we do.

So here's a couple guidelines when analyzing your bank accounts to determine where you're spending money and what you value.

If your car payment per month is more than what you're saving for the future, something needs to change.

A general guideline is that your car payment should not be more than 8% of your gross income.

So if your car payment is $1,200 a month, and your gross income is $10,000 per month, you're driving a car that is too expensive for your life.

Number two, if your mortgage payment is more than 25% of your gross income, you may want to consider downsizing so you can live a richer life of experiences.

And I know what you're thinking.

The housing market is really, really strong right now, and you probably couldn't find a house that would be lower in price and still meet your needs as a family.

But the point is being house poor does not put you in a position to build wealth.

Number three, if you're spending money eating out every day, start bringing a lunch or doing some meal planning.

I love a good restaurant.

I love eating out.

But if you're spending money every day eating out or getting a latte or door dashing, it's time to think about how you could dial back some of those expenses.

Number four, if you're going on two to three trips a year, but you're not saving at least 10% of your income for the future, you're sacrificing financial peace of mind really for Instagram moments.

I love traveling.

I love going on vacation.

But I don't do it unless there's extra money after I've put away at least 20% of my income.

Now, full disclosure here, I didn't always do it this way.

I put many trips on credit cards in my mid 20s, but I just don't do that today.

I may use a credit card for the miles or the points, but only if I have the money to pay it off in the next three months.

And number five, if it's Christmas at your house every day with two or three Amazon boxes, you just might have a little bit of a spending problem and need to reassess spending money on experiences rather than things.

You know, wealth is not just about what's in your bank account.

It's about living a life filled with rich experiences.

It's about traveling.

It's about close relationships with your friends and family.

And it's about living a life with a general sense of well-being and fulfillment and peace of mind.

I remember a situation where Tony Robbins was going around the crowd in one of his big live events, and he asked this woman, she was about 60 years old from what I remember, what would make her feel better about her life?

And she said, I want a million dollars.

And then he started digging deeper and deeper and asking her more and more questions.

And he finally got to the root answer of what she was really looking for.

And what she really wanted was peace of mind.

And then Tony Robbins asked her, do you really need a million dollars to have peace of mind?

And she responded after tears rolled down her eyes, and she realized that money had a control over her most of her life, and that a million dollars really wasn't what she needed or wanted.

It was just the feeling of knowing she was going to be alright.

So what does wealth mean to you?

Is it a number or a feeling?

We could go into the quantitative aspects of wealth, the qualitative aspects of wealth.

I don't want to bore you with that, but obviously the quantitative aspects of wealth are your numbers and financial security, and your qualitative aspects of wealth is maybe a feeling of fulfillment or abundance in life.

So think about for a moment what wealth means to you.

Is it a feeling of fulfillment and enrichment of your life?

Is it spending more quality time with the ones that you love, your kids, your significant other?

Is it to travel more?

Is it to give back and do some type of volunteer work?

Whatever that means, know what wealth means to you so that you can live a richer life.

And if you liked this episode, please rate the episode, make some comments and hit the notification bell to get updated on future Wealth Decisions Podcasts.

And please, if you could, share it with a family member or a friend.

My goal with the Wealth Decisions Podcast is to reach over 100,000 people by the end of the year in the Twin Cities and beyond so that people can make better wealth decisions to live a richer life.

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-Brian D. Muller, AAMS® Founder, Wealth Advisor

Disclaimer: This material is for informational purposes only and should not be construed as investment advice. Past performance is not indicative of future results. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.

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