Money and Values

 

Introduction

Welcome to your Personal Financial Management Course!

Before we begin you will need to gather some financial records. First, have copies of your pay stubs or other accurate documentation of what money comes into your bank account each month. If this number varies from month to month, make an average of the last six months.

Then, gather paperwork for your monthly bills such as mortgage/rent and utilities like electric, gas, water, sanitation, telephone, and maintenance. Also collect any receipts, credit card bills, records of car payments and anything else you spend your money on during the day, week, or month. Please take the time now to gather this documentation, it is very important to your success in this in this course.

Please take the time to gather the suggested paperwork, blank paper, a pencil or pen, and a calculator.

Money and Values

Do you ever feel like you are throwing your money away? Well, at least if you had thrown it away, you could look for it. I am not going to tell you how to make more money, but I will help you learn how to stretch your money.

Many people find success in looking for good buys, cutting down on careless spending, especially credit card spending, and coupon clipping. These are all viable options, and ones you may already be doing or may be interested in learning about. But for now we will focus on one guaranteed way to help stretch your dollars. What is that you ask? Well, it's writing down a spending plan!

A spending plan can help you look realistically at your income and how you have been spending it. Another word for spending plan is budget, but this word seems to have a negative connotation attached to it, so I prefer to use the neutral term spending plan. We all spend, but do we plan?

Before we get into the specifics of creating a spending plan, lets look at the psychology of spending.

                                                              Psychology of Spending

There are many things a person needs to live. In Maslow's Hierarchy of Needs, these are called physiological needs, such as air, food, water, and sleep. Without these things, a person could not live. Much of our spending accounts for these needs. However, and this is the key, a person's values helps shape this spending.

For example, a person needs food to live. But what is he eating? Where is he eating? Does he look closely at grocery store ads and buy items only when they are discounted? Or does he buy high, prioritizing organic and locally grown products? One is not better then the other. They simply show a person's values. To one eating is only a need, so they take the opportunity to pinch their pennies. To the other, eating means much more, and therefore they decide to spend a little more, but will need to tighten up in another area of their budget.

We make choices about how we spend our money, and whether we realize it our not, these choices are often based on our values. What is most important to us. If you live alone, you most likely make your spending choices independently. But, if you live with someone else, you are probably sharing expenses. It is necessary to think about what is important to you, and what you value most, so you can "put your money where you mouth is." So to speak.

We will now take a money and values quiz:

How do you know what your values are? Have you ever thought about them? Have you ever put them in words? This following quiz might help clarify the issues. Don't worry—there are no failing grades or scoring system. Just be honest with your answers. The function of this quiz is simply to open your eyes to exactly what you value in relation to money matters.