Money's Values

Everyone asks themselves what they’d do if they had a million dollars. But how many of us know whether what we truly value in life requires it?


Today’s culture seems to reward getting as much as you can for as little as possible. Buy one get one free, bundle your services for a discount, supersize your fries… Whatever you call it, the idea of consuming more for a lower cost per unit is nothing new.

But seldom do we stop and wonder when enough is enough. When will enough money actually BE enough money? And more importantly, how will more money make my life any better?

We all know we need money to make things happen. Whether we like it or not the exchange of money is the system we’ve all agreed (or been forced to agree) upon to exchange goods and services. It is what it is and there’s little we can do about it for the time being.

How we decide to spend our money is based on a series of short and long term goals or desires that we have. They can be short term, simple things like “I want a sandwich”, to longer term and more complex things like “I want to retire in 20 years”.

This is where most of us stop our train of thought. We know what we have and we usually know what we want, if only in the short term. But this whole process seems to still be missing something. If life is only about having means to do what we want to do, then really it’s just a series of desires that we use our money to satisfy until it’s all over… Seems a little bleak for my liking. Surely there must be more…

Well the “more “is your value system. It’s your why, your driving purpose, the things that make you really tick and get excited. It’s these things that motivated you to create the goals you have for your money in the first place. It’s one thing to want things out of life, and to have the money to do it. But without understanding why you want them in the first place, it’s easy to lose track of what’s important and feel like you have no control over what you work all day to obtain: your money.

Understanding your personal value system, and what’s most important to you in the world, is the central part of any initiative to try to get a handle on finances. Yet most of us seldom think about it. Let’s take an example. Suppose John gets a big tax return, and he decides to buy a new iPad. So he saves up, buys it, and chucks it aside after 3 weeks never to use it again. He was never really that into tech anyway, he just saw people had them and thought it’d be cool to have one too…

So he moves to the next thing he wants… Perhaps this time it’s a new TV. He gets the TV, mounts it on the wall and watches it… But soon it fades into the background as just a part of the house. So now, bored with his new TV he decides to go out for dinner and a movie with his family because he just doesn’t want to cook, let alone clean dinner after a hard week at work. All the while, he puts aside 200 bucks a month to save to buy a house because he was told it’s smarter than renting.

Now, let’s assume a few things about John’s situation. Let’s assume he makes good money, can afford what he’s been buying, and always pays the stuff he has to (bills, mortgage, etc.) on time. How can we evaluate whether the spending decisions he has made are good or bad? Certainly it would seem obvious to assume that you shouldn’t buy those things from a pure math perspective. iPads, TVs and dining out are all things that will never give you back the same money you put into them. In fact the only thing he is doing that makes what one would traditionally refer to as “financial sense” is setting aside money for his house purchase.

The next thing we’d likely try to ascertain is how much he enjoyed the items. Well it would appear the iPad didn’t really appeal to John… He chucked it after 3 weeks in the corner never to be seen again. The TV blended into the background, and he only went out for dinner because he wanted to get out of having to do work… This doesn’t sound like a great motivation for spending does it? It all seems to be coming from a place of quickly fading desires, or a lack of desire to do something as a result of stress. Finally, the house he’s saving for may excite him, but all we know is that he’s doing what he thinks is “smarter”. His spending habits are not seemingly in line with his deeper sense of purpose.

Let’s take Adam as our second example. Adam spends money on the exact same things. He saves up to buy his iPad and now you never see him without it. He’s a big-time gadget lover. A few weeks later he gets that new TV and his colleagues at work are getting headaches from rolling their eyes so much at having to hear about how totally awesome it is. And at the end of every week he goes out with his family to whatever restaurant they choose (they each take turns every week picking). As for putting the money aside for a house, he socks away 200 bucks a month for a home they can call their own, and eventually leave to their children.

Notice, these are the exact same spending decisions, but somehow Adam is having a lot more fun with it than John. This is because all of these spending decisions tell us something about them. For John, it seems like spending money is just something he does to stave off boredom. Moving from one purchase to the next like the thimble on the Monopoly board… But he isn’t seemingly enjoying it at all.

Adam on the other hand, is loving everything he is doing. Everything he is purchasing is enhancing his life… Because it is all aligned to his value system. We can tell what his value system is to some extent just by the reactions he gets on an ongoing basis from his purchases. He loves the iPad. He can’t shut up about his TV. And dinner at the end of the week is seen as an exciting opportunity with his family. Adam understands his value system, and is spending his money based on it. He loves gadgets, and so he bought the iPad. He absolutely loves having the best TV out there, and experiencing his media with perfect clarity, so he bought the TV. Time with his family means the world to him, so he treats them to dinner out every week. And having something he can leave behind to his kids is his motivation for the house purchase… He is living his value system, and his spending decisions serve to prove what this value system is.

When you look at what you spend money on, is it reflective of what matters most to you? Are you saving up for something simply because it’s what you “should” do? Or are you doing it because it’s going to help you express your inner value system? Surely there’s no point in working hours upon hours every single day for 60 years, just to finally stop and spend what you have left doing what you love to do.

So I would encourage you to have a look at your spending, not just to empower yourself through awareness of where your money is going, but also to ensure that what you spend is aligned with what’s most important to you. You’ll find by doing this, you will have taken a great step to making life better.

I always love connecting with new people and learning about their "why" in life. Feel free to connecton Twitter @NeelAFinancial, or email me at neel.aggarwal@sunlife.com.