Do you and your partner have simpatico financial values? Before having that conversation about saving and spending, budgets and risk tolerance, and debt, it might be constructive to take a little quiz.
So suggests the National Endowment for Financial Education, which offers a LifeValues Quiz, designed to help people “identify their values and understand how those values affect the financial decisions they make.”
Consider this question: When it comes to impulse purchases, do you:
∙Reflect on whether I’ve treated myself lately and then make my decision
∙Recall the commitments I have made to others and consider whether I should buy the item
∙Tend to buy only what is on my list unless the item offers serious savings on something I know will be needed in the future
∙Think about how well it will fit in with what I already own and enjoy
Or how about this: In general, I make life’s serious, non-financial decisions
∙Rationally and unemotionally, mostly as business decisions
∙Mostly on the basis of how they support my quality of life
∙After discussing them with friends or family I trust
∙Independently and privately, unlikely to discuss them with others
Nearly everyone, regardless of wealth level, is concerned with whether they have enough money and how long will it last. The 20-question quiz gauges four LifeValues as developed by Dr. Lois A. Vitt, chair and founding director of the Institute for Socio-Financial Studies (ISFS). These four categories correspond to people’s primary concerns in life.
Inner values “shape our sense of purpose and meaning in life, and the principles by which we live.” From a financial perspective, “they frame the behaviors that lead to financial security and the resourcefulness that can help survive a sudden money crunch.” A low Inner Life Value score means that you may be deferring to another’s expectations when making financial decisions, while a high score means that you have “a clear sense of self” and put a high value on identity, autonomy, safety and security.
Social LifeValues are related to “belonging” and concern family, spouses, neighbors, friends and the community at large. A low score in this category indicates a preference for financial independence, and saving to achieve personal goals. A high score, conversely, indicates your financial goals involve family or your community.
Physical LifeValues relate to more tangible pursuits and the degree to which you find fulfillment in aesthetic stimulation and material possessions. A low score in this category indicates you are not one to keep up with the Joneses, A high score could mean you are one to seek income and cash flow to achieve and maintain a certain standard of living,
Finally, Financial LifeValues reflect how you value money and what it can buy or how it can grow as an investment. A low score indicates a propensity to procrastinate in making financial decisions, or to make them impulsively, Spending, you like; budgeting, not so much. A high score shows a strong inclination to handle finances efficiently.
What are your financial values? Take the quiz by yourself or, better yet, with a partner and let us know the results.