Your Money: Cash Flow and Your Values

by | Mar 16, 2021

We are continually amazed when people (including other financial planning practitioners) talk about financial planning as though it is a purely mathematical exercise. Meetings are assumed to be about facts, statements, and rates, to which a tremendous amount of technical and academic expertise is applied. But you and your values? Those hopes and dreams and constraints that make up your WHY and are likely the reason you undertook financial planning in the first place? These seem to enter that conversation only rarely.

We know why this is: values are squishy things that are difficult to quantify. In fact, you might have difficulty even articulating them to your planner in the first place, which is why we’re spending an entire year writing about how to put words around your values so that you can eventually put actions around your words.

Each month, we’re alternating between exploring a specific value (like we did in February with Safety and Security) and how to put it into action using all the financial planning tools at your disposal. Then, in the following month, we’ll be exploring one of those tools and the ways it can be used in service to your values.

Today, we’re examining the many ways you can put your values into action through your cash flow.

Show Me The Money

Cash flow is at once the easiest and hardest way to put your values into action. It’s super easy to support the people and causes which you value with cash out of your own pocket, or to stop spending your dollars on things that do harm – no planning needed. It’s direct and to the point, which is why there are so many axioms about it:

Put your money where your mouth is.

Vote with your wallet.

Show me your calendar and your bank statement, and I’ll show you what you really value.

But money, like time, is so ubiquitous that it’s practically invisible. We use it up every day on necessary things, and then wake up and do it all again the next day. It’s hard to look up from paying the mortgage, buying groceries, and filing your taxes to wrestle with how to keep doing those things but in a way that supports your values. Believe us, we know.

So how, exactly, do you support your value of Safety & Security with your cash flow? Or your values around Family, Freedom, Achievement & Success, or Community, the values we’ll be exploring in future months?

We thought a lot about this as we were planning for this series of articles, and have dusted off our old friend Design Thinking to help you find the answer for yourself (because of course we did).

Your Values in Action

The first step is always to empathize, the Design Thinking word for “do your homework”. You need to set aside your assumptions about the world and the “normal” way things are done, so you can gain real insight into yourself and what is most important to you.

Fortunately, because we know how hard pinning down something as ephemeral as your personal set of values can be, we’re devoting every other article in this series to this step. For those keeners out there looking for extra credit, the AVI (A Values Inventory) test is another great way to do this homework.

With a deeper understanding of what it is you value, you need to define how this will manifest in what you do (and don’t) spend your money on.

This will look different for everyone, but here are a few examples to get you started:

  • You might value freedom and security, dream of cultivating a vegetable garden and outfitting your home with alternative heat and water sources to reduce your reliance on private utilities and food manufacturing.
  • You might value family, which may involve supporting parents from a distance during the pandemic by paying for grocery delivery, and hopping on a plane to see them as soon as it’s safe to do so.
  • You might value achievement and success, which could manifest in pursuing an advanced degree (or two, or five).

This is a crucial step, so don’t skip it. One of the questions we always ask our clients is “what does success look like for you?” and the people who spend time really thinking about it are hands down the ones who get the most out of life.

Once you know what success looks like, you can ideate all the many paths you might take to get there. This is always a fun exercise, since it’s literally brainstorming with no limits. We recommend pouring yourself a nice drink, grabbing several sheets of paper and a nice sharp pencil, and writing down every possible way you can spend your money on manifesting your values. Every idea counts, even the ones that start with “buy a lottery ticket and…” or “quit my job and…”

Building a prototype can be as simple as recalculating how much you can spend on eating out and setting up a monthly transfer to your savings account. Or it might be as challenging as finding an alternative to Amazon. Fortunately, prototyping and testing go hand in hand, so if today’s cash flow plan isn’t moving you closer to your values, make a new one! If it’s really not working, speak to a cash flow specialist who can guide you through building a system that works for your unique situation.

Cash flow is simultaneously one of the hardest and easiest financial planning tools to align with your values. It takes hard work to build a values-based cash flow system, but the rewards can be immediate and are always so worthwhile.

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