What’s Your Financial Philosophy?

Are you a saver, a spender, or some combination of both? Are you easily tempted into making impulse purchases? Are you inflexible in your savings goals? Do you float through life with only a vague idea of how much money is in your checking account? Do you obsessively check your balance on an hourly basis?

Few of us fit neatly into any given category when it comes to our finances. But we have personality traits and past experiences that shape our relationship with money. As discussed in our MoneyWise Matters blog post, “Financial Relationship Status: It’s Complicated,” most of us are emotional spenders. Few people are able to make purely logical financial decisions. Instead, we spend based on how we feel, and our feelings are impacted by a lot of internal and external forces.

Values & Goals

Values and goals shape many of our financial decisions.

Values are qualities or standards people consider to be worthwhile or desirable. These are the basic and fundamental beliefs that guide or motivate our attitudes and actions. Examples include: accomplishment, community, entertainment, generosity, and so on. Take some time to figure out your own values by using our printable worksheet.

Goals are the specific plans or purposes we have in life. Short-term goals can be accomplished in a few weeks, months, or even a year.  Examples include setting up a savings account and using it, building an emergency fund, or saving for a family vacation.  Long-term goals require more planning and saving, and they are often not realized for many years.  Popular long-term goals include homeownership, a college education, or a comfortable retirement. Take some time to figure out your own goals by using our printable worksheet.

Wants & Needs

As children, we are taught that needs are things we need to survive, like food, water, and shelter. Wants are all the stuff we can live without but would enjoy having. Using these simple definitions, we can put things like rent, groceries, and transportation into the needs category, and most of our entertainment options are considered wants. But reality is rarely this simple.

Your wants and needs are unique and personal. Everyone has different priorities, and so everyone has different wants and needs. You can identity your own wants and needs using our printable worksheet.

Remember, spending money on things you want today means you might not have what you need tomorrow. Each financial decision we make requires us to consider trade-offs. A trade-off is what you give up as a result of choosing one option over another. Having a long-term view when making financial decisions will help you achieve your financial goals.

Helpful Resources

Basics of Budgeting
Basics of Credit