Should Your Financial Plan Reflect Your Values?

Key Takeaways

• Your financial plan should reflect your personal values, including family priorities, lifestyle preferences, charitable interests, and long-term goals.
• Values-based financial planning connects your money with your priorities, helping you make decisions about saving, investing, spending, and giving.
• Family and lifestyle decisions have financial implications. Supporting children, retiring early, or purchasing a second home can affect your long-term strategy.
• Charitable giving and legacy planning offer ways to incorporate personal beliefs into your financial decisions.
• Your priorities can change over time. Reviewing your plan regularly can help you evaluate whether it still reflects what matters most.

What Is Values-Based Financial Planning?

Think about why you’re saving and investing in the first place. It is because: 

• You want to retire early and spend more time with family? 
• You want to help your children pay for college?
• You want to support a charitable organization?
• You want to leave something meaningful for future generations?
• You’ve worked hard for decades and simply want more flexibility in how you spend your time?

Your answers say a lot about what financial freedom means to you.

This is where the power of values-based financial planning comes into play, as it connects your financial decisions to your personal beliefs, family priorities, lifestyle preferences, and long-term goals. Rather than focusing exclusively on accumulating wealth or investment returns, it considers how you want to use your money throughout your life.

At iWealth, our Minnesota financial advisors believe these conversations should come before discussions about investment allocations, retirement projections, or account balances. After all, knowing how much money you have is important. Understanding what you want that money to do for you is equally important.

Why Should Your Financial Plan Reflect Your Values?

Consider two people who have each accumulated $2 million in retirement savings.

• One wants to retire at 60, travel, and spend more time with grandchildren. 
• The other enjoys working, plans to retire at 70, and wants to leave a substantial charitable legacy.

Although their financial situations are very similar, their planning needs are quite different. These examples illustrate why your financial plan should reflect your values because your personal priorities influence how you save, invest, spend, give, and plan for retirement.

Here’s how your personal priorities can influence financial decisions:

The point isn’t that every financial decision needs an emotional connection. It’s that your financial strategy should account for the reasons you’re making those decisions.

How Do Family Priorities Influence Financial Planning?

Your family may be one of the biggest influences on how you use your money.

But supporting family members can mean different things depending on your circumstances.

For example, you may want to:

• Help your children graduate from college with less debt.
• Contribute toward a child’s first home purchase.
• Set aside money for grandchildren’s education.
• Support aging parents who need additional care.
• Reduce your work schedule to spend more time with your family.
• Leave an inheritance that reflects your family’s values.

These goals often compete for the same financial resources. Consider working with a Minnesota financial planner to help you prioritize your financial plan and goals. 

Should Your Lifestyle Choices Shape Your Retirement Plan?

Your retirement plan should definitely reflect how you want to spend your time, not simply when you expect to stop working.

When you picture retirement, what comes to mind? 

Maybe it’s spending winters somewhere warmer than Minnesota, traveling with your spouse, volunteering, or pursuing hobbies you’ve put off for years. Perhaps you’d prefer working part-time, mentoring young professionals, or staying involved in a family business.

Each option has different financial implications. For example:

• Retiring at 60 rather than 67 may require additional savings and a longer-term retirement income strategy. 
• Purchasing a second home could affect your cash flow, taxes, insurance costs, and investment liquidity.

Before deciding when you can retire, consider what you want retirement to look like and what it may cost. That gives your financial advisor a more meaningful starting point for evaluating your retirement income needs.

Read our blog: “Does a Vacation Home Fit Into Your Long-Term Financial Plan?”

How Can Charitable Giving Reflect Your Values?

If supporting your community, educational institutions, religious organizations, or other causes is important to you, charitable giving can become part of your financial strategy.

You may already donate regularly. But as your assets grow, you might consider other approaches that involve your investments, taxes, or estate plan.

For example, suppose you own an investment worth $100,000 that you originally purchased for $25,000. Donating eligible appreciated shares directly to a qualified charity may provide different tax treatment than selling the investment and donating the proceeds.

The outcome depends on your holding period, income, itemization, recipient organization, and applicable tax rules. Your Minnesota-based financial advisor and tax professional can help you compare the available options.

Read: “How Do You Align Life, Family, and Financial Goals?”

How Do Business and Legacy Goals Fit Into Your Plan?

If you’re a business owner, your financial decisions may involve more than your personal retirement.

You may have spent decades building a company and want it to remain in your family.

Or maybe you’d prefer to sell the business, provide opportunities for employees, and use the proceeds to fund retirement.

Remember that a business transition isn’t simply a financial transaction. It may also represent decades of work, relationships, and personal commitments. Before making those decisions, consider:

• Business succession: Who would you like to own or operate the business after you leave?
• Retirement income: How much of your future income depends on selling the company?
• Tax planning: What tax consequences could result from a sale or ownership transfer?
• Estate planning: How should your business interests and other assets be distributed?
• Family communication: Have you discussed your intentions with the people involved?

As a Minnesota business owner, coordinating these decisions with your financial advisor, attorney, and tax professional can help clarify the available options.

Should Your Investments Reflect Your Personal Beliefs?

In most cases, it’s appropriate for your investments to reflect your personal beliefs, provided those beliefs are evaluated alongside your financial goals, risk tolerance, and investment time horizon.

For some people, this means considering environmental, social, or corporate governance factors. Others may prefer investing in particular industries or avoiding certain business activities.

However, personal investment preferences can involve trade-offs. Restricting investments or concentrating on preferred industries may affect diversification, expenses, volatility, and potential returns.

Your financial advisor can help you assess whether these preferences are compatible with your broader investment strategy.

How Often Should You Revisit Your Financial Priorities?

Review your financial priorities at least annually and whenever a significant life event changes your circumstances or goals. 

What mattered most at 35 may differ from what matters at 55 or 70.

• Early in your career, you may focus on raising children, buying a home, and accumulating retirement savings.
• As retirement approaches, your attention may shift toward income planning, spending time with family, charitable giving, or transferring wealth.
• Marriage, divorce, an inheritance, a career change, or changes in health can also influence your priorities.

An annual financial review provides an opportunity to discuss these changes and consider whether adjustments to your plan may be appropriate.

How Can iWealth Help You Build a More Personal Financial Plan?

At iWealth, we believe financial planning should start with a conversation about your life, not just your investments.

• What matters most to you? 
• What financial decisions are you struggling with? 
• What would you like your money to make possible?

As financial advisors serving Waseca, Mankato, Bloomington, and other Minnesota communities, we work with individuals and families to develop financial strategies that consider their circumstances, priorities, and long-term goals.

Schedule a conversation with iWealth to discuss how your financial strategy can better reflect the life you want to live.

Frequently Asked Questions About Values-Based Financial Planning

1. What Is the Difference Between Traditional and Values-Based Financial Planning?

Traditional financial planning generally focuses on investments, retirement, taxes, and other financial objectives. Values-based planning incorporates these considerations while emphasizing your personal priorities, family relationships, lifestyle preferences, and long-term goals. Both approaches can be comprehensive, but values-based planning places particular emphasis on connecting financial decisions with what matters most to you.

2. How Can I Align My Investments With My Personal Values?

Start by identifying the beliefs or priorities you want reflected in your investments. Review available investment options with your financial advisor, considering diversification, expenses, risk, and potential tax consequences. Investment preferences should be evaluated within your overall financial strategy rather than as separate decisions.

3. Can Financial Planning Help Balance Family Needs and Retirement?

Yes. Financial planning can help you evaluate competing priorities, such as funding education, supporting aging parents, and saving for retirement.

A financial advisor can model different scenarios and discuss how current commitments may affect future retirement income, investments, and cash flow.

4. How Can I Include Charitable Giving in My Financial Plan?

You can incorporate charitable giving through annual donations, appreciated securities, donor-advised funds, qualified charitable distributions, and estate planning arrangements. The appropriate approach depends on your assets, tax situation, charitable interests, and financial goals.

5. How Do I Find a Minnesota Financial Advisor Who Understands My Values?

Look for an advisor who asks about your family, lifestyle, priorities, and long-term goals before recommending financial strategies. Ask how the advisor incorporates retirement planning, investments, taxes, and estate considerations into client discussions.