Needs vs. Wants: The Long-Term Impact of Short-Term Decisions

Needs vs. Wants: The Long-Term Impact of Short-Term Decisions

March 26, 2024

Your values play a pivotal role in shaping your current and future financial decisions and behaviors because they serve as guiding principles that influence how you prioritize and allocate your resources. For instance, if you value experiences over material possessions, you might be more inclined to spend money on travel or dining out rather than on luxury items. 

Conversely, if you prioritize financial security, you might prioritize saving and investing for the future, even if it means sacrificing immediate gratification. Your values might influence everything from budgeting to investment choices, ultimately shaping your financial well-being.

A Causal Relationship Between Finances and Well-Being

Aligning your near- and long-term financial decisions with personal values can lead to greater satisfaction and fulfillment. When you spend in alignment with your values, you might feel a sense of purpose and authenticity in your financial choices. This alignment can reduce feelings of regret or guilt associated with money-related decisions, fostering a healthier relationship with finances overall. Additionally, when your values guide your financial planning, you set meaningful goals and stay committed to them over the long term, leading to greater financial success and stability.

However, conflicting values or a lack of clarity about your personal priorities can create tension and uncertainty in financial matters. Without a clear understanding of your values, you might find yourself making impulsive or inconsistent financial decisions that do not align with your long-term goals. It’s crucial, therefore, to reflect on and articulate your personal values, which will inform your financial planning. By acknowledging and honoring these values, you might cultivate a more intentional approach to managing your finances, leading to greater harmony between your monetary decisions and broader life objectives. 

Aligning your budget with your values involves a deliberate process of reflection and prioritization.

5 Steps to Help Align Your Budget With Your Values

  1. Identify Your Values: An important FIRST STEP is to identify and prioritize your core values. These could include things like financial security, family, personal growth, experiences, or giving back to the community. If you spend some time reflecting on what truly matters to you in life you will likely begin to prioritize differently with your financial resources.
  2. Evaluate Your Spending: Review your current spending habits; are they aligned with your identified values? Look for patterns in your expenses to see where your money is currently going and whether those expenditures reflect your values. You may discover areas where you're overspending on things that don't truly matter to you.
  3. Adjust Your Budget Accordingly: Once you've identified your values and evaluated your spending, adjust your budget to align with your priorities. Allocate more resources to areas that reflect your values while cutting back on expenses that don't. For example, if you value experiences, you might allocate more funds to travel or hobbies while reducing spending on material possessions.
  4. Set Specific Goals: Set specific financial goals that align with your values. Whether it's saving for a dream vacation, contributing to a cause you care about, or building an emergency fund for peace of mind, make sure your goals reflect what's most important to you. Having clear objectives will help guide your budgeting decisions and keep you motivated.
  5. Regularly Review and Adjust: Your values and priorities will likely evolve over time, so it's essential to regularly review your budget and adjust as needed. Set aside time periodically to reassess your values, goals, and spending habits to ensure they remain aligned. Be flexible and willing to make changes as circumstances change or as you gain new insights into what matters most to you.

Intentionally aligning your budget with your values allows your financial decisions to reflect what truly matters to you, leading to greater satisfaction and fulfillment in your life.

We’re Here to Help

If you are looking for a greater understanding of this process, Wilkinson Wealth Management, based in Charlottesville, VA, can assist you in this endeavor. 

Our team is dedicated to tailoring our financial planning services to your unique needs. In fact, our values define the work we do. We believe they are critical to providing the outstanding and personalized financial guidance our clients have come to expect from us.

Feel free to reach out for further information at 434-202-2521 or use our Contact Us page to schedule an appointment.

About Jacquelyn 

Jacquelyn Nasca has been with Wilkinson Wealth Management in a variety of capacities since 2012. She brings 14 years of experience as an Accredited Financial Counselor® helping families improve their financial status, eliminate debt, plan for their financial future, and address the emotional challenges many people experience around money. She also holds a Bachelor of Science from East Tennessee State University and a Master of Science in Marriage and Family Therapy from the University of Maryland.

In addition to being a member of the Financial Therapy Association, she has professional certifications as a Clinical Fellow in the American Association of Marriage and Family Therapy (AAMFT) and as an Accredited Financial Counselor® (AFC®) with the Association for Financial Counseling, Planning, and Education® (AFCPE®). Jacquelyn also has 24 years of leadership experience as a U.S. Army Officer (MAJ, Ret) in the Military Intelligence and Personnel and Human Resources corps, 6 years of financial advisor administrative and compliance operations, and 24 years of marriage and family therapy services.