Cynthia Dalagelis is the SVP of ESG and Impact Investments at Amalgamated Bank.
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What are your values and how do they show up in your life, in your relationships, your work, your home and your finances? Now more than ever it's deeply important to create a framework for ways to listen to and love your value set. We have more options than ever and are immersed in information telling us what to think, how to act and what is the "right thing to do." That's why when it comes to creating a plan to live in the most authentic way possible, taking steps to align your finances and spending decisions is a key step to be sure you are putting your money where your mouth is.
Creating a personal finance strategy that matches your personal values can be a challenging but rewarding process. Here are some steps that you can take to help you create a financial plan that aligns with your values:
• Identify Your Personal Values: Take some time to think about your core values and what is most important to you. Some examples of values that might impact your financial decisions could include security, freedom, generosity, sustainability or social responsibility.
• Define Your Financial Goals: Once you have a clear understanding of your values, identify your financial goals. What do you want to achieve with your money? Do you want to pay off debt, save for a down payment on a home or invest for retirement? Make sure your goals are specific, measurable and realistic.
• Evaluate Your Financial Status: This comprises of sources of income, your expenses and any debt you might have. It's important to have a clear understanding of your financial situation before you can develop a plan to achieve your goals.
• Align Your Spending With Your Values: Review your spending habits and identify areas where you may be spending money in ways that don't align with your values. For example, if you value sustainability, you may want to reduce your consumption of single-use plastics or choose to buy from companies with strong environmental policies.
• Make A Budget: Once you have a clear understanding of your values, goals and spending habits, create a budget that reflects your priorities. Be sure to allocate money toward your goals and values, and adjust your spending in other areas as necessary.
• Explore Ways To Generate Supplemental Income: If you are not meeting your income goals, finding ways to generate passive side income is a great way to create additional income not tied to your main career. Consulting, online sales, teaching and skill sharing are a few ways to create extra cash using the skills you already have.
• Revisit And Evaluate Your Plan Annually: As your income, debt and expenses may change, it's critical to revisit your plan to ensure it still holds accurate to your current situation and circumstances. The purchase of a home and other larger items can affect your debt-to-income ratio, and your percentage in each one of your saving, spending and investing buckets might need to be adjusted.
By following these steps, you can create a personal finance strategy that not only helps you achieve your financial goals but also reflects your values. As the world continues to evolve and change at a pace more rapidly than ever before, having a road map that you can refer back to is a very grounding framework to guide your decisions going forward.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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