Financial Education | Employee Services
KMS
Why You Spend the Way You Do
Katie Sauer Financial Education Program
Director
Employee ServicesSpring 2014 Expos
Examining Our Spending
What are the underlying reasons for why we spend the way we do?
unconscious habit conscious habit satisfy unconscious needs values-driven
The Four LifeValues
Inner– psychological and spiritual
Physical– health and environment
Social– family, friends, and communities of interest
Financial– sufficiency, sustainability, appropriatenessVitt, Lois. (2009) Values-Centered Financial Education: Understanding Cultural Influences on Learners’ Financial Behaviors. Institute for Socio-Financial Studies. Available online at http://www.smartaboutmoney.org/Tools-Resources/LifeValues-Quiz/Lifevalues-for-financial-educators.aspx Accessed 12/16/2013.
Inner LifeValuesInclude our
identity and social identity desire to worship (or not) as we please need for safety and security
Constitute our desire for freedom and independence control over our life, goals, and
priorities
Shape our sense of purpose and meaning principles by which we live
Physical LifeValues
Pertain to the tangible aspects of life amount of space we need
degree to which satisfied and fulfilled by aesthetic stimulation and material possessions
actual health of our bodies and measures we take to secure that health
desire for beauty and comfort
Social LifeValues
Values of belonging and relatedness family (spouse, kids, parents, extended
family)
friends
neighbors, coworkers
community
peer groups, organizational groups
Financial LifeValues
These are your subjective values about finances, unrelated to how much money you actually have.
Reflect what we think or believe about our
money and financial affairs how we value money and what it can do
for us
They may or may not be related to what you actually know about money or finance.
How did you score?
Internal: 11Social: 1Physical: 5Financial: 3
Interpreting Your LifeValues Quiz Score
The main point is to see which decision factors
are driving our financial choices.
A score above 9: dominant decision driverA score below 4: less important decision driverFairly even: domains are balanced
It’s not better or worse to be balanced or high/low!
High I Score
Clear sense of self
“Invest” in self-expression, seek own sense of purpose, want an environment that reflects “who you really are
Do whatever you can to achieve your goals and make your dreams come true
More concerned with own future and less regard for others’ needs or demands
Low I Score
May be a little out of touch with your need for personal expression
Plans for the future might not be fully developed
Spend money on other people or to achieve a particular lifestyle
Might unwittingly be depriving yourself
High S Score
Look after the needs of others more than your own
Seek to work and play with people you care about
Favorite goals involve family and/or your community
Decisions are made with loved ones in mind
Low S Score
May be a loner and tend to make decisions in your own self interest
Personal goals tend to be more important than family or community goals
High P Score
Want income in order to achieve a certain lifestyle or standard of living
Value prosperity in order to enjoy material goods and comfort
Want to enjoy your home and surroundings
Plan for a comfortable future
Low P Score
Materials and consumables have little interest for you
More focused on people or job satisfaction than “keeping up with the Joneses”
Spend for others or for safety or self-expression
Modest plans for the future
High F Score
Like your job just for the financial aspects
Like to get a good value for your money
Planner for both the long run and short run
Enjoy “hands on” financial decisions
Value accuracy, organization, and discipline
Low F Score
Budgeting is annoying
Job satisfaction drives your work
Automatic systems work well for you
Spending is aimed at relationships or lifestyle
Impulse buying
Don’t enjoy money topics
Using Your LifeValues to Make Decisions
For each financial decision, ask yourself questions like:
Will it make me feel more secure or in control? (Inner)
Will it increase enjoyment of my surroundings or is it good for my health? (Physical)
Will it connect me with others? (Social)
Will it be appropriate, given my resources? (Financial)
The goal is to purposefully navigate your way through the spending decisions you face every day.
The quiz and additional resources are available for free online:
http://www.smartaboutmoney.org/Tools-Resources/LifeValues-Quiz.aspx
