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Values Based Financial Planning

Align Your Values With Your Financial Planning

Don't judge each day by the harvest you reap, but by the seeds you plant. ~Robert Louis Stevenson

Values-Based Financial Planning 

What is values-based financial planning? Values-based financial planning is aligning your financial goals with your values. It is a way to plan for retirement while incorporating your charitable and social goals. From socially responsible investing to creating an annual gifting plan to leaving a legacy to your church or charity, values-based financial planning seeks to incorporate your values into the nuts and bolts of your retirement, investments, insurance, income tax, and overall financial planning. 

Values-based planning has many benefits. Donations help promote family values and social responsibility. There are also income and estate tax benefits. If planning is done early enough, charitable gifts can be be set up in a way that they produce retirement income as well. Each situation is unique, and the strategies vary per client. All the options, however, require planning. While most deductions will be taken right away, as the donations may be small, more substantial donations will have effects that could last for years or even decades. 

An Overview of Values-Based Financial Planning in 

4 steps:  

Step 1: Define What is your personal mission? What are the charities or organizations you want to support? What does your spouse and family believe? How should we define success? 

Step 2: Analyze current situation What are the pros and cons of your current financial plan? How effective is your current charitable giving plan? Do your portfolio investments align with your values? 

Step 3: Implement There are many tax and financial strategies available to help you meet your goals. Here are three examples:

  • Create a retirement income plan that benefits you and your charity.
  • Create a customized stock and bond portfolio of companies that support your values. Such values may include religious values, equality for all, paying a living wage, environmental concerns, or a track record of charitable giving.   
  • Creating a legacy through a Family trust to support your church, alma mater, or other not-for-profit. 

Step 4: Monitor Life has a way of changing. Tax laws change. Your circumstances change. Family dynamics change. We meet regularly in person or via a phone conference to discuss your values-based financial plan and evaluate if changes are necessary.  

Learn more:

 Kiplinger's: How to Make Investing More Meaningful 

   Kiplinger's: Gifting a Life Insurance Policy to a Charity

Summit Financial Partners with SEEDs to Introduce ESG Investment

 Values-based financial planning is a way to align your values with your financial goals. I truly believe, if done properly, it can be a win-win. The benefits can be immediate and long lasting. 

Michael Aloi, Financial Planner