Building a Legacy: Values-Based Financial Planning

Imagine a financial plan that doesn't start with spreadsheets or stock charts.

Instead, it begins with a simple question: what truly matters to you in life?

Values-based financial planning is a revolutionary approach that puts your core beliefs and aspirations at the forefront.

It moves beyond traditional methods to integrate money and meaning into every decision.

This framework designs your financial strategy around your life purpose, relationships, and impact.

By aligning finances with your deepest values, you can build a legacy that endures.

Redefining Financial Planning for a Meaningful Life

Traditional financial planning often focuses solely on numbers, products, and generic goals.

Values-based planning, however, starts by clarifying personal values, beliefs, and life goals.

It seeks to create harmony between your wealth and your wellbeing.

This approach is about more than accumulation; it's about using money to support what you cherish.

Below is a comparison of different planning styles to illustrate this shift.

This table highlights how values-based planning offers a more holistic and personal touch.

It transforms finance from a chore into a journey of self-discovery.

Why Values-Based Planning Is Rising in Importance

Today, many people feel financially off-track and overwhelmed by abstract goals.

Surveys show that 66% of Americans believe their financial planning needs improvement.

This growing dissatisfaction fuels demand for more personalized guidance.

Evidence from firms like Morgan Stanley indicates a shift toward holistic planning.

For instance, 67% of HR leaders say help with financial planning is essential for employees.

Financial planners are adapting to this trend, with 88% planning to learn more about clients' values.

This reflects a broader movement toward life-centered advice that reduces stress.

Key reasons for this rise include:

• Increasing financial stress, with 70% of Americans reporting feeling stressed about money.
• A desire for peace of mind and confidence, not just portfolio returns.
• The need for planning that respects diverse identities and experiences, such as for women and underserved groups.

By grounding finances in values, people find motivation and clarity.

Measurable Benefits and Emotional Value

Values-based planning delivers tangible benefits that enhance quality of life.

Research from Vanguard reveals that advised clients value emotional outcomes highly.

At enrollment, 74% of clients considered the emotional value or peace of mind from advice.

This approach amplifies benefits like reduced anxiety and better decision-making.

Specific advantages include:

• Portfolio monitoring saves time for 61% of clients.
• Investment selection saves time for 60%.
• Peace of mind is a key benefit for 50%.
• Goal-setting and progress monitoring are valued by 41%.

These statistics show that values-based planning frees mental bandwidth.

It turns saving from a burden into a purposeful act tied to life goals.

For example, if saving is linked to a child's education or a philanthropic cause, follow-through increases.

This method builds confidence and fosters long-term commitment.

Building Your Values-Based Plan: Core Elements

Creating a values-based plan involves several key steps that translate ideals into action.

It begins with clarifying what you hold dear and why.

Common core values that shape financial choices include:

• Security: such as emergency funds and insurance for stability.
• Family: focusing on education, caregiving, and shared experiences.
• Freedom and flexibility: enabling career changes or early retirement.
• Health and wellbeing: investing in physical and mental health care.
• Generosity and impact: through charitable giving or ethical investing.
• Growth and achievement: pursuing entrepreneurship or advanced education.

To discover your values, use practical methods like guided reflection.

Ask yourself questions such as, "When have you felt most proud or fulfilled?"

Or, "What would you regret not having done if life were short?"

Ranking exercises and storytelling about money memories can also provide insights.

Once values are clear, translate them into concrete, measurable goals.

This makes objectives more meaningful and less overwhelming.

Examples include:

• For security: maintain a 6–12 month emergency fund and adequate insurance.
• For family: fund college costs and plan intergenerational trips.
• For freedom: achieve financial independence by a specific age.
• For generosity: tithe income or establish a donor-advised fund.

This translation helps prioritize tradeoffs and enables multi-goal planning.

Next, adopt values-based budgeting to manage cash flow intentionally.

Key aspects of this approach are:

• Start with fixed obligations, then allocate remaining cash by priority.
• Create "value buckets" for categories like family experiences or giving.
• Focus on spending more on what matters most, not just cutting costs.

This reframes budgeting as a tool for building a meaningful life.

It connects each dollar to your deepest aspirations, reducing waste.

Investing with Purpose and Creating a Lasting Legacy

Values-based investing extends this philosophy to your portfolio.

It involves putting money into causes that reflect your ethics and beliefs.

This could mean focusing on environmental sustainability or social responsibility.

Such investing allows you to vote with your wealth and align assets with values.

It's closely related to impact or faith-based investing strategies.

By doing so, you ensure that your financial growth supports positive change.

Ultimately, values-based planning is about crafting a legacy that transcends wealth.

It integrates all aspects—from insurance to estate planning—in service of your priorities.

This method fosters a sense of fulfillment and reduces financial stress.

It empowers you to live authentically and leave a mark on the world.

Start today by reflecting on what you value most and taking small steps.

With values as your guide, you can build a financial plan that truly enriches your life.