Financial Education | Employee Services KMS Why You Spend the Way You Do Katie Sauer Financial Education Program Director Employee Services Spring 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, appropriateness Vitt, Lois. (2009) Values-Centered Financial Education: Understanding Cultural Influences on Learners’ Financial Behaviors. Institute for Socio-Financial Studies. Available online at Quiz/Lifevalues-for-financial-educators.aspx Accessed 12/16/2013.

Inner LifeValues Include 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:11 Social:1 Physical:5 Financial: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 driver A score below 4:less important decision driver Fairly 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: Tools-Resources/LifeValues-Quiz.aspx

Let’s Connect Katherine Sauer, Ph.D.