Financial Values, Attitudes and Goals
FS-591, April 2003
Debra Pankow, Family Economic Specialist
The Importance of Setting Goals
Have you ever felt you are not getting what you really
want out of life? Do you know what you really want out of life? Three groups
of Harvard graduates were studied several years ago. Those who wrote down their
goals were the most successful at reaching them. Those that "mentally"
wrote down their goals were moderately successful. The individuals who did neither
were the least successful. The key to success in achieving what you want out
of life is understanding yourself and then carefully setting some goals -- and
writing them down.
Your Financial Values
Your goals are a reflection of your personal values.
Values are relatively permanent personal beliefs about what
you regard as important, worthy, desirable or right. Values tend to reflect
your upbringing, and change very little without conscious effort over a lifetime.
For example, some families and individuals hold their faith as a very high value,
for others it may be education or a successful family business enterprise. It
is important that we recognize our values and understand the values of other
people with whom we closely interact.
Financial Values Inventory
If you are not aware of you own money values, there is
an activity at the end of this publication to start your thinking. Imagine you
have just received $100 you do not need for everyday expenses. Go through each
pair of items, and circle the item on which you would prefer to spend the money.
When you are finished, total the number of times each item was circled.
Financial Attitudes
Attitudes are a measure of your state
of mind, your opinions and judgment about the world in which you live. They
reflect a position you have taken with your values and are much more flexible
than values. For example, one family may place a very high value on children
and have a very positive attitude about raising them and providing opportunities
for them. Both spouses may value higher education, yet one spouse may have a
more positive attitude toward the University of North Dakota, and the other
may have a more favorable attitude toward North Dakota State University.
Goal Setting
Dreams are the stuff of which life is made. We all have
them. Yet many people wonder how they can ever realize their dreams, or give them
up when they experience roadblocks, detours and curves on the way. It is often
difficult to achieve a financial dream when there are many financial issues that
seem to take priority.
Daily expenses, buying a car, paying off a mortgage or
debt, saving for your own or a child or grandchild's education, saving for retirement,
taking a family vacation, caring for aging parents -- multiple and competing
demands on our finances make achieving our dreams sometimes appear to be impossible.
How can you manage all these financial challenges and
at the same time keep your dreams alive? How can dreams become reality?
Goal Setting Activity
This goal setting activity will allow you to write down
your goals, perhaps for the very first time! To complete this activity, you will
need 8-12 index cards.
Start by writing your dreams on these cards. Your dreams
aren't just dreams anymore, they have now become your goals! Don't leave anything
out -- this is your "wish list." Make your dreams specific, put down
a year and if there is a financial cost, estimate what that will be. Examples
might be:
Retirement home in Arizona .
. . 2020 . . . $45,000
Graduate school . . . 2010
. . . $20,000
Used pontoon and lift .
. . 2004
. . . $8,000
Trip to Australia for two
. . . 2007
. . . $5,000
Now sort your cards into two stacks: goals you want to
accomplish in the next five years or less, and goals that will take longer than
five years. You will see later why it is important to separate long- and short-term
goals. The important thing is that you save for them differently. Now sort your
cards in each stack in order of priority.
On the back of each card, write what you would need to
do to make that dream a reality. Also write down money you have saved already
for that goal (if any) and other expected sources of money that may help you
achieve your goal.
For example, if one dream is a trip to Australia for
two in five years at an approximate cost of $5,000, you might write, "Save
$1,000 a year for five years." In this example, the couple has already
saved $1,000 for their Australian trip, and receive a $300 check each year from
their co-op, they may revise their goal to say "$4,000 for a trip to Australia,
need to save $4,000 minus $1,500 co-op distribution check, or $2,500.
Now decide how much money you would need to save each
month to achieve that goal, by first turning the number of years you have to
reach your goal into months, and then dividing the dollar amount of your goal
by that number.
In the Australian trip example, the couple would have
five years or 60 months to achieve their goal of saving $2,500. Sixty (months)
goes into 2,500 (dollars) 41.66 times. That means this couple needs to save
$41.66 each month for five years to reach their goal. Doesn't $41.66 a month
sounds a lot more manageable than the original goal of $5,000?
Once you have determined the dollar amount per month,
you may discover you do not have enough cash flow to reach all your goals. That
is where your order of priority comes in. What are you willing to give up so
that you will have the resources necessary to reach this goal? How hard are
you willing to work and save to achieve a particular goal? Are you willing to
take on a second job? How realistic is each goal when compared with others?
You may need to reorganize your goals. Put those that are now unrealistic back
on your wish list. If circumstances change, you may still be able to realize
those dreams, too!
The dreaming and goal-setting process becomes a little
more difficult when you are part of a family. Every one should have their own
dreams and goals, but as members of a family, it is important to consider and
respect each other's goals.
For those who are part of a family, you can repeat this
goal-setting exercise with your children, partner or both. You may need to limit
each person to two or three short-term and long-term goals. Once everyone has
written up the financial aspects of their goals, the couple or family needs
to look at competing goals and re-prioritize them as a family.
Final Thoughts
The value of setting and writing down goals cannot be
overemphasized. There's one more thing to remember when setting your goals --
be flexible. If you encounter barriers that seem like they might keep you from
your goal, don't give up on your goals. Instead, modify them to meet your new
situation. However, if a particular goal becomes something that is no longer important
to you, then you should be open to letting it go. That will allow you to put your
energy into pursuing goals that are important to you.
Your goals start as a dream, but with financial planning, determination and
communication, you can make them a reality! And by understanding your financial
attitudes and values, the better chance you will have to reach your goals. Your
trip to financial security will be successful if you keep your destination in
mind. Along the way, take time to truly enjoy the trip, by being able to identify
and achieve those things you really want out of life.
Financial Values Inventory
Your values are beliefs or ideas that you consider important
or desirable. Everyone has values, but everyone does not value the same things
equally.
To help you recognize some of your own money values,
read the pairs of words below, then circle one item in the pair that would be
your first choice in answering the question, "If you had an extra $100,
on which of the two items would you spend your money?" You must make one
choice in each pair.
Housing (Dream Home/Vacation
Home)
Retirement Savings/Investments
Education: Self/Others
Vacation/Travel
Retirement Savings/Investments
Hobbies/Sports
Social Activities/Eating Out
Car
Education: Self/Others
Housing (Dream Home/Vacation Home)
Personal Appearance/Grooming/Clothes
Car
Retirement Savings/Investments
Hobbies/Sports
Hobbies/Sports
Car
Housing (Dream Home/Vacation
Home)
Vacation/Travel
Vacation/Travel Church/Charitable
Giving
Hobbies/Sports
Church/Charitable Giving
Vacation/Travel
Personal Appearance/Grooming/Clothes
Church/Charitable Giving
Social Activities/Eating Out
Housing (Dream Home/Vacation
Home)
Retirement Savings/Investments
Hobbies/Sports
Housing (Dream Home/Vacation Home)
Church/Charitable Giving
Social Activities/Eating Out
Personal Appearance/Grooming/Clothes
Vacation/Travel
Retirement Savings/Investments
Social Activities/Eating Out
Education: Self/Others
Car
Personal Appearance/Grooming/Clothes
Education: Self/Others
Now total the number of times you circled each item
in the pair activity:
____ Car
____ Charitable Giving
____ Education
____ Hobbies/Sports
____ Housing
____ Personal Care
____ Retirement
____ Social
____ Travel
(Adapted from the High School Financial
Planning Program (NEFE@), 1992.)
Now you can rank your values. Write down the values (car,
retirement, charity, etc.) having the highest number of "votes." This
list reflects the items you consider most important in their order of importance.
By knowing your values, you can make sure your goals and attitudes reflect your
values. The closer they all match your spending plan, the easier it will be
to reach your financial goals and financial security. Did you learn anything
new about yourself in this activity?
Money Attitude Worksheet
This activity will only look at one of your attitudes
-- your attitude toward money. First, answer the 10 questions, circling yes or
no, depending on how you feel about the statements.
Now count the number of yes answers to find out the degree
to which money controls your life. Where do you think your attitude toward money
came from? Are you like your parents? Your spouse? Or different?
Your financial values and attitudes affect the financial
goals you set. The more harmonious your values, attitudes and goals, the greater
the likelihood of attaining them.
WORKSHEET - What's Your Money Attitude
I need more money than I can ever use. Yes No
It bothers me when I discover
I could have gotten the same thing for less somewhere else. Yes No
I behave as if money were the
ultimate symbol of success. Yes No
I show signs of nervousness when
I don't have enough money. Yes No
I dream I will one day be fabulously
wealthy. Yes No
I find it difficult to part with
money for any reason. Yes No
I worry that I will not have
enough money to live comfortably when I retire. Yes No
Money controls the things I do
or don't do in my life. Yes No
When I was a child, money seemed
to be the most important thing in my life. Yes No
I argue or complain about the
cost of things. Yes No
For more information on this and other topics, see: www.ag.ndsu.nodak.edu
FS-591, April 2003
|
