The Most Important Question You Could Ever Ask About Money
What does money mean to you? A while back I talked about how this very question can be the source of great friction in relationships but it goes beyond that. Whether you are in a relationship or not, you are in a relationship with your 
money whether you spend a lot of time consciously thinking about it or not. Even if finances are the neglected step-child in your personal life, it is still there and your mindset and relationship to it is running the show.
Several years ago I asked colleague and Savvy Ladies Founder Stacy Francis what is one financial book she really likes that she would recommend I read. She suggested I read “Smart Women Finish Rich” by David Bach. I must admit that I let this one sit on my shelf for a year or two before I recently dusted it off. It has been my “morning read” book with breakfast the past few weeks. In the book Bach starts with the most important question you can ask yourself : What is Important About Money to You? He then uses this question to guide the reader through the Values Ladder exercise which is taken from the book “Values Based Financial Planning” by Bill Bacharach.
Lucky for me this conversation is not new. When I hired my most recent financial planner several years ago the first thing we did when I met her was to march through the values ladder exercise in Bacharach’s book. For me it was the first time I ever thought about money in this way. No surprise that it coincided with my foray into the coaching profession. It was like the world was conspiring to get me aligned with my own values first before I launched into helping others.
The values ladder is a brilliant coaching tool that asks the question “what is important about money to me?”. The key to getting at the heart of the matter is that your answers need to be values based, not goals based. That means your answers look something like “security”, “freedom”, “adventure”, “confidence”, “peace of mind”, etc. Those are values based answers. As opposed to goals based answers like “pay off my credit card debt”, “buy a new home”, or “save $X for retirement”. Now goals are important, but I can assure you that if you put the cart (goals) before the horse (values) you are building your financial future on unstable ground. Orienting your life around goals is unfulfilling and uninspiring. Orienting your life around your values leads to a sustainable pull forward toward your goals while living more fully right here, right now.
So, back to the example… I would answer the question “what is important about money to me?” with “security – peace of mind”. That’s great, but it doesn’t dig deep enough. As a coach I know the real good stuff, the answers with the power to radically shift our relationship with money often lie deeper than the first answer or two. As a result, this exercise keeps asking the question – “what is important about?”. So in this case the next question would be – “what is important about security-peace of mind?” I might answer “freedom with no constraints”. Again, a great values based answer but there is more to it. So you keep asking the question “what is important about…” until you have reached your final answer – the one that can’t be mined any further. In my exercise I ended up with “self-actualization” and “living fully”. In some of the exercises in the book people ended with “making a difference/helping others” or “living fully with my family right now”. The end point looks different to everyone.
The point of this exercise is to get clear on what is really important to you about money. Then armed with this knowledge you can delive into the more goal-oriented and action plan oriented steps of financial planning. More importantly, you can take a hard look at what is important to you about money and whether or not your current life is aligned with what is most important. For instance, if “being with family and friends” is your most important value and you’re spending 80 hours a week commuting and working your life is not congruent with what really matters. That can come as a shock and leave you feeling powerful emotions.
Part of the reason why people avoid these types of exercises and want to launch right to the how-tos is because of how scary and painful it can be to discover that your life is out of whack. Yet awareness is the first step toward a more inspiring future, so why not wake up today rather than years down the road or when you find yourself face to face with illness or death?
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Paula Gregorowicz is the Comfortable in Your Own Skin(tm) Coach and helps women achieve success on their own terms. Discover “The 5 Crucial C’s You Need to Succeed in Life” for free download.
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Paula: That was a thoughtful and inspiring post.
Often, I want to skip over the hard parts and get right to the how-tos. Call me shortcuts. I don’t think I’m afraid of the pain and process, but rather I just want to fix whatever is wrong as quickly as possible. So I typically skip ahead to the action plan. But you’re right… awareness is the first step. Great reminder!
I’ve been in crisis/damage control with my finances for so long. I have no idea how to think about my money in a values-based way. I feel like taking the values-based approach is a luxury that has to wait until I have more financial freedom and some latitude with where I put my money.
This is probably totally not the case.
I can hear your frustration Erica. However the coaching question would be — “when will that be? and if not today, then when do you get to start living by your values?”
I wrote a longer article on this very topic “When Will You Be Happy” that you might want to check out.
This article resonated with me. I’ve never been very good about money, and I think the reason why is because I plan out the how to’s without putting thought into the whys. The reason I want more control over my money is to gain financial freedom. As you write in the article, this is a great values-based response, but doesn’t go very deep. And it sets me up to fail because when I slip — as we all do sometimes — I start to think, “well, financial freedom will take half a million, that’s so far away, how will I ever have that?” From there it’s an easy fall to using my credit card. I’ll have to mullthis over.
Thanks for a thought-provoking article.
I want to be out of debt so that I don’t have to worry about debt anymore. I want to have enough to retire and live frugally. I don’t want to be rich, but I also want my investments to do well.
I suppose you could say my biggest value is peace of mine–no debt, lower investment risk, and long-term security. I know money can’t buy security but it can help in certain situations.
Thanks, Paula. I’ll check that out.
Thanks for all the great responses. To both Mrs. Micah and Jay — I’d suggest taking the question further. For instance “peace of mind” — keep going with the questioning. “What is important about peace of mind to you?” You might also phrase it — if you had peace of mind, what would that mean? What would you be doing?
For some it might be … more time with family & friends. So the power comes in when you take it even further than I did in the article…. OK, as you map out actions to move towards that…how can you have more of the time with family & friends right now? That brings your “far off” dream — the feelings and elements of it closer so you 1) don’t feel so futile (“like I need a million dollars to get there”) and 2) allows you to live fully now. After all none of us know how long we have in this life…. we could check out this afternoon or 50 years from now. No sense waiting for “someday” and never getting there. Work toward the future goal, live in today.
Hope that helps! And, btw, I will be doing an extended free teleclass on this topic on January 21st. I am going to put a post up about it here next week. Would love lively questions and situations from the Queercents community to make it a great class — much like this comment thread!