Financial Advice
Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.

How to be More Purposeful with Your Money

How to be More Purposeful with Your Money

For as long as money has existed, it has been widely debated whether it can buy happiness. Of course, the answer largely depends on how one defines "happiness," which is a subjective definition rooted in one’s relationship with money. Therefore, if you are seeking genuine happiness, it would be necessary to closely examine your relationship with money and its role in your life.

Being Purposeful with Your Money Brings More Lasting Fulfillment

Much depends on how you define ’happiness’ and money’s role in your life. For many people, their level of happiness is based on comparing their lifestyle to another’s. If they can keep up with the Joneses, then they think they are happy. To them, status achievement is the measure of happiness. At the extreme end, you will find people who spend money that they don’t have to buy things they don’t really need, just to impress people they might not even like.

For others, happiness is defined more by their positive feelings about themselves, which may have little to do with money. It’s more about the level of trust, love, support, and respect they receive from friends, family, and colleagues. In fact, for these people, money can actually get in the way of the positive feelings and the fulfillment they yearn for.

Elevating the Purpose of Money in Your Life

Being purposeful with your money means making conscious decisions about how you earn, spend, save, and invest your funds so they align with your values and goals. Here are some steps you can take to be more purposeful with your money:

Clearly define your life ambition: Start by defining your short and long-term financial goals in terms of what you want to achieve in life. Do you want to save for a specific purchase, pay off debt, invest for retirement, or support a cause you care about? A clear understanding of your life ambitions will give you a sense of purpose and guide your financial decisions.

Create a spending plan: Develop a spending plan that aligns with your goals and priorities. Track your income and expenses to determine where your money is going. This can help you identify unnecessary expenses you can reduce to allocate more funds towards the things that truly matter to you.

Practice conscious spending: Before making any purchase or financial decision, ask yourself whether it aligns with your values and goals. Consider if the decision will lead to long-term satisfaction or just fleeting happiness.

Research and educate yourself: Take the time to educate yourself about personal finance and investment options. Understanding the risks and rewards associated with different investments can help you make informed decisions and invest your money purposefully.

Align investments with your values: Consider allocating a portion of your investment funds to companies and industries that align with your values. You could invest in companies that support your causes or look for investment opportunities with local small businesses or promising start-ups.

Become more charitably inclined: For many families, the true value of money is in the shared value it can create for society by leveraging what they have and serving others. A plan to give back to society can include the whole family volunteering, participating in clothing drives, and other fund-raising activities. You can also systematically give to your favorite charities through donor-advised funds. Ask your financial advisor about how they work.

Find your passion: Don’t settle for coasting through the next stage of your life without being able to apply your talents meaningfully. At some point, it’s no longer enough to know you will have enough money; you must know how to make the most of it. Consider trading work you no longer want to do for work you really enjoy doing, whether through volunteering, monetizing a hobby, starting a new business, or helping others acquire your knowledge and skill set.

Being purposeful with your money is a journey that takes time and effort to develop good financial habits. It starts with having a clearly defined vision of what a good life is like and the ambition to achieve it. You’ll have greater success if you start small, making incremental changes while celebrating your progress along the way.