When Should Other Values Trump Sound Personal Finance Decisions?

After the recent discussion of stay at home parenting and the stellar response that it received, it became clear that the question about whether to be a stay at home parent wasn’t so much about money as it was about values.

In most situations, sound personal finance choices are in line with typical goals, such as buying a home or saving for retirement. However, many people are compelled to make long-term value-based choices that have negative long-term personal finance ramifications. I know we are, as we piece through whether or not it makes sense to have a stay-at-home parent.

This realization made me think deeply about what the purpose of The Simple Dollar is and the value of what I talk about on here. So often, this site takes the bottom dollar and makes it king above all else: what maximizes your pocketbook. The truth of the matter is that personal finance isn’t an end to itself, but merely a tool to help you achieve your dreams.

Like any tool, personal finance can be dangerous if you don’t wield it correctly; giving a person without a strong financial backbone a credit card is like giving a two year old a machete. However, in the hands of a mature person, personal finance is a precision instrument that can be used to turn an unfinished dream into a beautiful reality.

In other words, personal finance decisions should complement your dreams, not replace them or fight them. When you make a choice, personal finance management is a skill that can let you know how that choice will affect many of your other choices. Can I really afford this? isn’t merely a money question; it’s a question of how important is this thing to your overall life in comparison to other things.

In the past, I’ve spoken of a “switch” that goes on for people when they suddenly “get it” and start kicking their savings into gear and start eliminating debt. That switch has nothing to do with money; it is merely a switch from focusing on short term goals like a new sweater to focusing on longer-term goals like owning a nice home and retirement. At the core, it’s not a growth in personal finance skills, it’s a change in goals and values that lead to a person trying out new finance tactics.

Whenever you read a piece of advice on this site, take it in the context of what’s important to you. When I demonstrate a way to save ten dollars, ask yourself whether this is a tool you can use to achieve your dreams. When I talk about building an emergency fund or buying a mutual fund, ask yourself whether this matches up with your true values.

Remember always that “finance” is the second word in personal finance; the first word is “personal.” Let your own goals and values lead the way whenever you make a choice, and use personal finance as a tool to assist in those choices.

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