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Your Principles in Your Financial Plan

Your Principles in Your Financial Plan

February 14, 2021

Your Principles in Your Financial Plan

Hi everyone, and welcome back to Melissa Making Cents!

As a CERTIFIED FINANCIAL PLANNERTM and financial coach, I've learned a lot when it comes to people. I regularly interact with people from all walks of life, which can be a very eye-opening and humbling experience. One of the things that I've learned through many years of service is how different people view money in various ways. While some view money as a means to an end, others view it as the end goal. Conversely, while some view money as a beautiful thing, others view it in a more sinister light. 

There are all sorts of ways to view money and beliefs of how you should interact with your finances. One thing that some may find interesting regarding finances and financial planning is that people's personal philosophies interact with their financial plan and how it operates. However, one thing that's true regardless of your views is that having a certain amount of money and a financial plan in place to deal with how you're going to interact with that money is an absolute necessity. 

Adhering to people's religions, philosophies, and personal principles is a must for any aspiring financial planner or financial coach. One of the things that financial coaches and financial planners, like myself, are forced to learn early on is that we're dealing with people. People are different, which means that there's no cookie-cutter plan when it comes to ensuring people's principles fit snuggly into their financial goals. 

Believe it or not, my favorite question when traveling the world is, “What are your thoughts on money?” Sure.. anyone can ask locals about where to eat, and what to see. Truly learning about different cultures means that you can dig deeper into their beliefs.  I’ve personally had my eyes opened a few times, and the lessons I have learned from traveling the world has given me a more in depth understanding of money.

While you are reading this blog post, I want you to take a few moments to reflect on your finances and answer the question, “Are you currently satisfied with the way your personal principles align with your financial plan?

Finding the Balance Between Your Financial Goals and Your Personal Principles. 

Melissa Cox CFP explains balancing your principles and your financial goals.

Just to shed a little light on what we're going to be talking about today, we will be talking about two types of principles (neither one is your principal from high school). The first type of principle or principles that we're going to be talking about are financial principles. These are well known and widely used financial strategies that people use to get out of debt, invest, and maximize their wealth. The second type of principle we're going to be talking about are personal, religious, or spiritual principles. These are firmly held beliefs or belief systems that people strive to achieve and maintain throughout their lives. 

To some, it can seem like a tall task to adhere to your personal principles while trying to follow sound financial principles. However, I'm here to (hopefully) help you realize that there are ways to follow the personal principles you'd like to live your life by while incorporating budgetary and investing principles into your financial plan. 

It's Important That Your Principles Align with Your Financial Plan 

Melissa Cox CFP explains that it's important to align your principles and your financial plan

Whether they're personal or shared by a group, our principles are one of the largest influencers of how we exchange, communicate, and deal with the outside world. While many in the finance field feel like their principles dominate those of their clients when it comes to money, that simply isn't the case. There are multiple reasons that it's crucial to align your principles with your financial plan. 

For starters, maintaining structure throughout your life is a core tenet of being human. Some financial professionals believe the best course of action for everyone is to become debt-free, protect their income, and accumulate as much wealth as possible. While that's undoubtedly a very popular path and route to take, it isn't the only option for different reasons, whether spiritual or personal. Individuals may choose to live with a "cap" on their income. Some may scoff at the idea of limiting personal wealth, but that's an ignorant approach to understanding culture, individuals, and society. As humans, we're sure to be happier if our financial plan is streamlined with our belief system, even if that means others may judge us for one reason or another. Contrary to popular belief, being a financial planner doesn't mean that I'm supposed to help each and every one of my clients get filthy stinking rich. It means that I'm here to assess their personal goals and help them achieve those goals by utilizing and maximizing their income and financial situation. 

Outside of people who may want or choose to live under a specific monetary constraint, there is also the other side to be considered. Philanthropy and charitable giving are other examples of how someone may want to utilize their financial plan to live out their personal, religious, or spiritual truths. As a financial planner, it's my job to help you do that in any way possible. That means that if your goal is to get as rich as possible and give money on the side, I'm here to help you figure out how to achieve that goal. If your goal is to get as wealthy as possible in hopes of donating as much of your money while still maintaining some base-level quality of life, I'm here to help you get there.

My hope as a CERTIFIED FINANCIAL PLANNER™ and financial coach isn't to just get everyone rich. It's to help people set their goals and find the financial freedom that allows them to relentlessly pursue and eventually achieve their goals, whether those achievements are monetary, philanthropic, or charitable. 

Our Beliefs About Money

Melissa Cox CFP explains our beliefs about money

There are several beliefs and schools of thought about money. These come not only from the financial side but from the side of personal philosophy and religion. I always do research beforehand when writing a piece like this. These are some of the personal beliefs and principles that I've found that one might wish to work into their financial plan. 

Living Debt-Free is a Popular Financial Principle

Melissa Cox CFP talks about living debt free

Living debt-free. Not all debt is the same; credit card debt is undoubtedly different than a mortgage. Various debts are accumulated for a variety of reasons, some better than others. However, some people might wish to live a debt free life for either personal or religious reasons. This is certainly achievable but would be very difficult to do without the proper financial plan. Paying off existing debt and avoiding putting up debt in other forms is a battle on multiple fronts that involves strict budgeting and adequate allocation of income.

Saving Money on Behalf of your Family is a Personal Financial Principle

Melissa cox CFP talks about saving for your family

Saving money for family may be on your radar and a personal principle you have. Whether you're saving for your children or grandchildren to go to school or you're just a cool relative who's looking out for the best interest of your family, it's important to create an actionable plan that helps you along the way. Keep in mind if you want to put money aside for a loved one's college costs, that contributions can affect scholarships and benefits that parents and children are eligible for. If you're interested in learning more about that, I wrote an article called Saving for Your Grandchildren that might apply to your circumstances! 

Investing for Your Future is a Personal Financial Principle

Melissa Cox CFP talks about investing for your future

Investing is another way you may need to live through your principles. Keep in mind that investing doesn't necessarily mean dealing with Wall Street. There are multiple ways that your personal beliefs and principles could affect the way you invest. For starters, you might not want to invest in stocks, bonds, and mutual funds. You may also wish to only invest in private corporations or choose to directly invest in local businesses. Investing is a just way of growing your money, but it isn't the only option on the table.

Living a Minimalistic Lifestyle is  a Personal Financial Principle

Melissa Cox CFP talks about living a minimalistic lifestyle.

Living a Minimalistic lifestyle could mean a lot of things to a lot of people. Some who live minimalist choose to hold onto only the necessities, while others take it a step further. If you're a minimalist in your finances, you must have a serious and in-depth conversation with whoever you're working with to plan your finances. Being a minimalist could actually work in your personal financial favor if it means that you're cutting down on your flexible expenses. 

Charity and Charitable Giving are Personal Financial Principles

Melissa Cox CFP talks about charitable giving

Charitable giving is one of the most common personal principles that some wish to incorporate in their financial plans. Luckily, there are tons of ways to go about this while still advancing your personal monetary and budgetary goals. Of course, you'll need to work with a financial planner or coach to hammer out the details but let's talk about some specific ways that you may wish to charitably contribute. 

One option would be to set aside a specific dollar amount of every check or of your monthly income to contribute to the charity of your choosing. By doing this, you'd have a set goal that you contribute yearly, monthly, and quarterly. You could also choose to contribute with a percentage amount of your income or remaining budget after expenses. I find this option great for people whose income varies, but it leaves you a little more in the dark when contributing specific dollar amounts. 

One might also wish to contribute to charity non-monetarily. You could do this by volunteering or donating goods, foods, or clothing items. No matter how you may choose to approach your charitable giving, there are ways to work it into your financial plan. And don't forget! The government loves givers, and there are ways that you can make the most of your charitable giving as tax write-offs! (Just check with your tax advisor or CPA before making your donations).

Religion is another crucial part of people's lives and heavily influences their personal principles, morals, and ethics. Investopedia has an excellent article that's essentially an outline and comprehensive guide to faith-based investing. A majority of churches work and operate through donations. Working a regular donation into your financial plan can be done very similarly to how one might incorporate charitable giving. Your religion also may dictate how you need to spend your money, where you can spend your money, and how you need to budget. If that's the case, it's imperative to be as clear and upfront with your financial planner or financial coach about the do's and donts of how you'd like to budget and plan your finances. 

Living by Your Principles Through Your Financial Plan is Rewarding

Melissa Cox CFP explains how rewarding it can be to live by your principles.

Many people deal with the shame that comes with success. They feel that they're inhibiting others because they're successful, but that isn't necessarily true. It's easy to think that our success must come at the cost of someone else, but one of the great things about accumulating wealth is having the freedom to choose when, where, and how to spend that money. 

When it comes to your principles, you must stick to your guns. Charitable giving, religious donations, and ethical investing are all options that are on the table for your financial plan. While it's many people's goal to double, triple, and quadruple their wealth so that they may live the most luxurious lifestyle possible, it's okay if that isn't your goal. Having a financial planner or financial coach that's willing to work with you to make a financial plan that achieves success on your terms is one way of carrying out your mission and living by your principles. 

Create a Dedicated Account for Principles such as Giving and Charity

Melissa Cox CFP suggests having a dedicated account for charity.

A concrete real-world example of living for your principles through your financial plan is charitable giving. Earlier, I mentioned some ways in which one might budget for charitable giving on a monthly basis. Still, there are multiple ways one might go about donating and saving for charity. While some may wish to contribute a percentage of their income or a dollar amount on a monthly basis, others might want to save and be able to make sizable donations at a specific date. Reasons you might wish to do this are things like:


  • Donating to build a building.
  • Funding a school.
  • Buying textbooks for a school.
  • Helping your church expand. 

If donating in one of those ways is more your groove, that means you're going to need to start saving. In previous posts, I've written about How Buckets Fit Into Your Financial Plan. If you don't know, using buckets is a way of keeping your money separated and organized so that nothing gets mixed up. Well, suppose you're saving to donate a large sum of money to charity. In that case, you may find that keeping it in a separate savings account is a great way to save that money individualized from your personal finances. 

Giving After You Die 

Melissa Cox CFP talks about giving after you die.

It's easy to get wrapped up in how we can live by our virtues and principles in life, but what about after death? There are ways to set up and make sure that your money is appropriately handled upon your passing. Donor-Advised Funds, Estate Planning, and Creating Charitable Legacies are ways to ensure our money and finances are going to good causes after our death. Though all of this happens after we're gone, the only way to ensure your money goes where you want is by making proper preparations beforehand. Speaking with a financial advisor is perhaps your best option for this.  

We're all works in progress, just like our finances.

Melissa Cox CFP reminds you that we are all works in progress!

As a last word of advice, keep in mind that just like our finances, all of us are lifelong works in progress. The growing is never done, and we all stumble. I say this because it's easy to feel as if you aren't living up to your principles or your finances in one way or the other. However, you shouldn't let that get in the way of where you'd like to be. There's no time like the present to make the switch and start becoming the person you'd like to be. Living by your principles and incorporating them into your financial life is hard, but it's doable. 

A CERTIFIED FINANCIAL PLANNER™ Can Create a Comprehensive Financial Plan To Help You Align Your Principles with Your Financial Plan

As a CFP Melissa Cox CFP can help you create a plan to balance your principles and financial plan.

Like I said in the beginning, I'm in the business of helping you achieve your goals. Everyone's goals are individually held and personal, which means that you need a financial plan and financial planner who's willing to take the time to create something truly unique. If you'd like a financial professional who can help you outline what's important to you and work out concrete ways to achieve your goals, I'm your gal. Please feel free to call or email and schedule an appointment with me. Whether it's charitable giving, living by your principles/religion, or creating a way for you to fund a charitable cause upon your passing, I'm dedicated to creating financial plans that are genuinely personal and unique to each of my clients.

Schedule a call with Melissa Cox CFP®

Until next time...this is Melissa Making Cents!

Melissa Anne Cox, CERTIFIED FINANCIAL PLANNER™, is also a College Planning and Student Loan Advisor and Financial Coach in Dallas, Texas.

Read last week's blog post by Melissa Cox CFP®