Why Values-Based Financial Planning is Powerful and Can Really Lead Every African American to Success

Historically, financial planning has been an out of reach arena for many African Americans. This is due to the focus of financial planning on investable assets and the lack of such assets in the African American community.

That said, there are also many African Americans who went to college and are now finding themselves with higher income careers. They have the ability to change the course of their families! However, the overall long-term financial planning of this particular group is not as strict as it should be when it comes to their investable assets.

It’s easy to focus on relieving the pain of not having an income or not having enough wealth. Especially at the expense of an African American’s cultural or personal values. In fact, most counselors will only focus on the value of “having more money” with this group, especially for those who have been marginalized. But is this the right approach?

Is the pursuit of his financial success goals based on his values ​​(i.e. values-based financial planning)? Unfortunately, we don’t take the time to sort out what really matters to us. What many of us get, when it comes to creating a financial plan, is someone else’s idea of ​​what our values ​​should be! For example, do you want your investments in mutual funds and exchange-traded funds to include private prisons?

Here are the two dimensions of values-based financial planning:

  1. Goals/dreams and construction/implementation.
  2. Values-Based Financial Planning Goals (Values ​​First)

What do you think of when you hear about “values-based” financial planning?

Most often, conversations about finances do not include personal or even cultural values. We often hear “The pursuit of happiness involves the pursuit of money for money’s sake.“I was once told that I shouldn’t worry about anything but making money today. Once I had money, I could then decide to be charitable!

As a Certified Financial Planner™ (CFP®) professional, I believe the first step starts with articulating your values ​​around financial success. Here are some examples :

  • Family
  • Faith
  • Career
  • Durability
  • Sports

Your thoughts around family may include raising your children or grandchildren. This can be a private school based on your religion and/or paying for a four-year college education. It can be a stand against abortion or support for the foster family. Your climate change concern may be to march against the XL Pipeline or to promote recycling and other sustainability measures.

I’ve found that many of our long-term goals become more specific the closer we get to the time frame in which we want them to be achieved. However, without a planned destination, we will not know what we need for the journey. Often there are many competing goals.

We have to make value judgments about which goals can be fully achieved or find a way to satisfy each goal in a way that works for us. Often, this prioritization process helps you better determine what really matters most!

Values-Based Financial Planning Design

Let’s say you want to build a house. You may be so excited about having a house built that you may not think of expressing your desire to build it in an eco-friendly way. Also, not being an expert in the field, you may not know the extent of your options, such as ways to keep construction green or ways to ensure the completed home operates in an environmentally friendly manner.

Hopefully your architect will ask about whether or not to use green materials. Some materials can increase the construction cost. Some materials can be advantageous in the short term in terms of reducing operating costs.

If you are like my sister-in-law, you would be willing to absorb these costs even if there is no short-term payback due to your strong desire to fight climate change.

You may decide that some are worth the investment and some are not. That’s why it’s your values-based financial plan, not someone else’s. However, if the issue of green building materials had never been raised, you might not know if this desire for green building would be incorporated into your home.

You can also choose to focus your charity planning on organizations that promote your sustainability and climate change values. You can do this through ongoing charitable contributions during your lifetime and charitable planning upon your death.

I believe everyone should have an estate plan that reflects their current values. While most of us assume we have more tomorrows to get things done, none of us are truly promised the next minute!

Building on values-based financial planning

For some, values-based financial planning can mean socially responsible investing (environmental, social and governance investing or ESG investing). Your views and feelings may be concerned about climate change. In other words, you can ask your investment advisor representative to seek investments in companies that are either primarily green or those that make significant investments in green operations and social action. You can also search for green investment funds. There are so many investment strategies that can be pursued to help support your deepest values.

Also discuss your values ​​with your tax advisor and estate/wealth planning lawyer so they can further refine your plan in their specific areas of expertise. Having a coordinating wealth advisor is important to ensure that all professionals work together to maximize the achievement of your goals.

Ready for a values-based financial plan review?

Are you committed to values-based financial planning? Have you actually written down your values? Have you discussed this with your finance team, tax advisor, estate planning lawyer, Certified Financial Planner™, etc. ? If not, talk to a Certified Financial Planner™ who embraces Lifetime Financial Planning or Values-Based Financial Planning, so that not another day goes by where you pursue the values ​​of someone else rather than yours.

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