Creating a Values-Based Financial Plan

Personal values ​​play an important role in many aspects of our lives and have become more important recently in how we think about and manage our finances. More and more investors are wondering how they can support the causes they care about through their financial decisions.

Charles Schwab’s latest Modern Wealth Survey found that 69% of Americans say supporting the causes they care about most is a top consideration when it comes to their financial decisions. If you count yourself among them, consider starting with a financial plan to ensure you stay on track toward your long-term goals while staying true to your personal values.

Set your savings and spending goals

The best way to start is to translate your dreams into concrete financial goals. Identify your most important goals and commit to saving for each. Write things down so you can gain confidence, stay focused, and refine your plan over time while prioritizing both your own financial well-being and the greater good.

For example, we recently had a client who was looking for ways to maximize her charitable giving on a limited budget. After identifying the causes to which she was most linked – the environment and medical research – we established a three-year charitable giving budget. It has helped her stay on track with her long-term plan while mixing creative ways to give back, including ongoing giving through a donor-driven fund supporting cancer research and cancer care. volunteering for river cleanups on weekends.

I also see this values-based approach in consumer habits, with nearly eight in 10 Americans (79%) indicating that they aim to support brands that align with their beliefs. Buying local, buying second-hand goods and choosing brands that support environmental and social causes are some of the ways consumers are making an impact with their purchasing power. Knowing what you need to save to reach your goals also helps you determine how much you can spend. Armed with this knowledge, you can then spend in a way that aligns with your values.

Align your investments with your values ​​and interests

As personal beliefs and interests become increasingly important in saving and spending, investors are also looking for ways to link these values ​​to their personal portfolios. Nearly three-quarters of US investors (73%) agree that their values ​​guide their investment choices, and most (69%) say they invest in companies that align with their personal values. When looking at the factors that influence investment decisions, a company’s reputation (91%) and corporate values ​​(81%) are almost as important as more traditional factors like a company’s performance. company (96%) and its share price (93%).

As you build your own portfolio, there are various options to help you align your investments with your values. Environmental, social and governance (ESG) investing or socially responsible investing (SRI) are two strategies that are gaining traction. Additionally, thematic investing, an approach that uses research to identify relevant trends, opportunities and companies and group them into broad themes, allows you to customize your investment based on interests and values.

Whether you’re an experienced investor or just starting out, you can use DIY investing tools and resources or work with a financial advisor to invest your money while making a positive difference. Whatever your goals or assets to invest in, you have choices to make sure you’re on the right track.

Investing involves risk, including loss of principal. Diversification strategies do not guarantee profit or protect against losses in declining markets.
The information here is provided for informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor should review an investment strategy for their own particular situation before making an investment decision.
©2022 Charles Schwab & Co., Inc. (“Schwab”). All rights reserved. SIPC member.
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Branch Network Manager, Charles Schwab

Joe Vietri has been with Charles Schwab for over 25 years. In his current role, he leads Schwab’s branch network, managing more than 2,000 employees in more than 300 branches across the country.

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