What Motivates Your Finances?

One of the issues that can get in the way of a solid financial future is ignorance of your own motivations. Many of us are not used to self examination, especially when it comes to finances. This is because we often think of our money as something that comes in, and then is saved and spent. We rarely think about why we do certain things beyond acknowledging that we are saving “for the future” or that we need to “pay the bills.”

However, in order to understand your finances better, it can help to thoughtfully consider what motivates you to do what you do. In some cases, you might discover that some of the money decisions you make have no basis in what you are interested in accomplishing.

Money Motivations

Most of us have a variety of reasons for the choices we make. These motivations may even be somewhat obscure to us, since we haven’t made an examination of them. You can get started on uncovering your own financial priorities and values by honestly considering whether any of the following motivate you:

Status: One of the biggest money motivators is the desire to impress others. We talk about “keeping up with the Joneses” quite a bit in the personal finance blogosphere. It can be brutal to recognize that status is one of the reasons you make the spending decisions that you do. But it is a very real motivator, since many of us inherently want to fit in — and that includes having what others have. Of course, the desire to impress can also motivate generosity and charitable donations. Many use their desire to appear generous as a motivation to donate large amounts of money to worthy causes.
Survival: In some cases, financial motivation comes from the requirement to achieve the necessities of life. Putting groceries ahead of entertainment could indicate that you are more focused on making sure you have what is needed to survive. Decisions to work extra jobs or cultivate additional income streams might also be based on survival.
Fun: In some cases, financial decisions are motivated for fun. The desire to live in the moment, and spend freely, could be motivated by an attitude of enjoying oneself immediately, rather than thinking ahead. On the other hand, many people save up for lavish vacations, intent on having the most fun possible on a trip, rather than spending the money as it comes in.
Quality of Life: Many make decisions based on quality of life. Some feel that having more things makes them happy. Others would rather spend money on experiences, and care little for the material items in their homes. Quality of life spending decisions can also include purchases made for personal comfort. On the flip side, the decision to participate in frugal family activities, such as picnicking, might mean that your quality of life is influenced by quality family time.
Financial Stability: For those in debt, money decisions might be motivated by reaching financial stability by paying down obligations. For those with an eye to the future, financial stability might mean setting aside more in retirement investment accounts, rather than doing certain things now, so that you have a more secure financial future. You can also take it another step further. Why do you want financial stability? Is it so you are in a position to help others? So you have fewer worries later? Or so you can do what you want to do now?

Before making your next financial decision (especially if it is a purchase), stop and ask yourself why you are making that decision. Probe your decision and honestly evaluate the reasoning behind it. If you don’t like what you see, maybe it’s time to set new priorities and find new money motivations.