Why Values are important for Financial Planning

Values

“the principles that help you to decide what is right and wrong, and how to act in various situations”

You will often hear a company talk about their “core values”.  

Here are some examples:

• American Express “Customer Committment”
• KPMG – “We lead by example”
• Ikea – “Daring to be different”
• Netflix – “Courage”.

When you employ a business consultant, one of the first things they ask you is to define your core values – we have done this process at Xentum.

Yet when we sit down with a family to discuss their financial plan and we ask them to define their family core values, we often get a blank stare to start with.  

At Xentum we believe that your family finances should be run in a similar way to a professional company (core values, balance sheet, cash flow forecast, 5 year plan, regular updates etc).  

This is why we put Values at the very core of our WealthPlan™  process.   

Why do we ask about Values at Xentum?

When it comes to finances and money, our future is often defined by decision making whether we like it or not.  

We generally become the decisions we have made either large or small on a consistent basis.

Decision making can be a new habit that we decide to implement each day or a big decision such as selling your business or changing your employment.  

The problem with decision making is that it is very hard!  

Knowing when to take an offer for your business or hand your notice in is often an impossible decision to make for most. 

We believe that decision making becomes easier once you align those decisions with your values. 

Examples of Aligned Values

A personal example  

One of my values is “time with my family. “

One of the decisions I made is to prioritise my children’s school run in my working week.  

When I align my value with my decision making over whether to take a meeting at 9am then my decision becomes simple.  As I type this I am getting ready to drop my daughter at school and have my first meeting at 10am.  

A client example 

One of our families had a value of “flexibility” linked to having more time to spend with their family whilst their children were younger. 

When we demonstrated that they could spend time off from their busy working lives to take a bucket list trip and also a large career change from corporate into private world this made the decision fairly easy.  

One small decision and one huge decision both made on the basis of values based financial planning.

This is what aligned values look like.  

Being honest with values

When we talk about values with clients and families we talk about honesty as it is fairly easy to spot when values and decisions are not aligned.  We are not here to judge, just advise on what we believe is best for that family.

For some also, they have not even considered their values and this can take some time.  

We often get bogged down in the details of goals (which we will cover in a separate blog) and solutions rather than looking at the bigger picture of what we really value.  

It can really benefit to spend some time thinking about these values and writing them down.  You will be amazed how clear your thinking can become. 

Here are some examples of common values amongst the families we look after:

Health

Happiness

Convenience

Travel

Intellectual Work

Giving

Education

Legacy

Wellbeing

Relationships

Security

Progress

The key is to make sure that your decisions particularly around money are lined up to your values!

‘When your values are clear to you, making decisions becomes easier.’  Roy E. Disney