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Understanding Your Values

understanding your core values helps you live a meaningful life

❝The secret of being is not only to live but to have something to live for.❞ -Fyodor Dostoyevsky

I'm driving down the road on a warm, humid summer evening listening to a new CD I bought. It's 2003, I'm in college, and I'm on my way to meet some friends at a local sports bar.

I have a large subwoofer in my trunk, so I can listen to music very loudly as I cruise down the road. I'm excited because I just had a new stereo installed in my car. I don't particularly like the music I'm listening to, but it sounds really good with a subwoofer, and it gives me a lot of attention as I am driving. I get to the bar excited to show off the new clothes I bought earlier today. There are drink specials tonight, so I find myself buying rounds of drinks for not only friends but people I have just met.

I'm in college, struggling to make ends meet. Yet I find myself spending money on subwoofers, new car stereos, CDs I don't like, expensive clothes I don't need, and drinks for people I haven't met.

If you were on the outside looking in, you would say that I must value music, fashion, and entertainment. The truth is, I never put in the effort to understand what was important to me.

when you behavior and values are misaligned you are being inauthentic
authenticity is when your choices and values are in alignment


Personal values represent things that you consider to be important in life. They are the measuring sticks we use to determine whether or not things are good or bad, right or wrong, and so on. You pick up your values mostly in childhood and through your life experiences (much like Money Scripts). Your family system, your culture, and the socioeconomic status you grew up in all shape what you deem to be important. Your values are beliefs that you've internalized and become part of your identity, and they help you evaluate whether or not your behavior and actions are in line with what you value.

When you find yourself living in line with what you value, you are being authentic and engaging in valued living. You're more likely to experience meaning in life and life satisfaction. On the other hand, if you find that you are not living in line with your values, you're more likely to experience a lack of meaning because you're acting in a way that's not true to who you are; you're being inauthentic.

You can have many different values, which can be different across various life domains. A life domain is a specific part of your life, like work, leisure, family, or relationships. It's possible to value something in one life domain but not another. For example, you might value efficiency at work but not in your friendships. You might also find that some of your values overlap various life domains. Creativity, for example, might show up in work and leisure. Since life domains change over time – say, you retire and no longer have a life domain associated with work – it is common to find that your values change over time.

you can have different values across different life domains

The Value Compass is designed to help you gain insight into your own values and how they guide your thoughts, feelings, and actions. It can be used to explore your personal goals and motivations, as well as to gain a better understanding of others' values and how they may differ from your own.


To live in a way that is not in line with what you value is to live in a way that is not true to yourself. It can be uncomfortable to act in a way that is out of line with what you find important because it means that your actions and your values are not lining up.

Another view is that we only make decisions that align with what we value. You may have heard some version of, "You don't have to tell me what you value. Let me see your bank statement and your calendar, and I'll tell you what you value." While there may be some elements of short-term values versus long-term values here (in the short run, I value not getting in arguments, but in the long run, I value honesty), it is more likely true that people just haven't put in the time to become aware of what they value.

Still, there is a kernel of truth to it. Your actions support what we might call your default values. If you don't spend time understanding what's important to you, then your actions determine your values for you.

your actions point to your default values

As you start to understand what you value, you can start to be more intentional about acting in line with your values. When you do that, your core values will become your default values.

grow the overlap between your default values and your core values


Understanding what you value is important. However, that's not the whole picture. It's also important to understand why you value a particular value. There is a difference between intrinsic values and extrinsic values.

Intrinsic values are something you do for the sake of growth. You partake in behaviors that satisfy intrinsic values because doing so is important to you. These are freely chosen, meaning that you aren't being told that you have to have this value. Intrinsic values give you a sense of ownership over them, and it doesn't feel like it's being forced upon you. You choose intrinsic values to pursue this value in and of itself rather than to avoid the negative consequences of not pursuing it. Behavior that satisfies the intrinsic value is self-rewarding.

intrinsic values

Extrinsic values, on the other hand, are taken on because you think you are supposed to. There is an external reinforcer or motivator behind the value. Extrinsic values are those you hold as a means to some other end. Behavior deriving from extrinsic values isn't something you do just to do them. You do them because you would feel guilty if you didn't or because you got something else in return.

extrinsic values

There are likely intrinsic values underneath any extrinsic value you may have. The second step to value identification, after identifying your values, is to determine the extent to which they are intrinsic or extrinsic and try to find the intrinsic value that underlies each extrinsic value.

intrinsic values vs. extrinsic values


Once you are clear on your values, you can then use your values as a lens through which you view your decision-making. Understanding what is most important to you gives you confidence in what you want out of life. It helps you live your life in a way that you would be proud to reflect on. Your values can serve as a guide and help you prioritize any decisions that you have to make. By being more aware of and leaning into your personal values, you can make sure that your actions and behaviors on a day-to-day basis reflect your values and not somebody else's values. Being more aware of your values helps you live more intentionally and make decisions based on your values rather than making emotional decisions.

values help make decisions

The first step to valued living is to uncover what your values are. It is well worth the time and effort to understand and get to the root of your intrinsic values so you can design your life around them.

You get one life; live intentionally.


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Related Meaningful Money Reading
References and Influences

Miller, William: On Second Thought

Richards, Carl: The Behavior Gap

Sinek, Simon: Start With Why

Vos, Joel: Meaning in Life

Wagner, Richard: Financial Planning 3.0

Wallace, David Foster: This is Water

Note: Above is a list of references that I intentionally looked at while writing this post. It is not meant to be a definitive list of everything that influenced by thinking and writing. It's very likely that I left something out. If you notice something that you think I left out, please let me know; I will be happy to update the list.



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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