What is important to me? How do my values influence my financial decisions? These are some of the key questions I’ve begun to ask as I move deeper into the “third stage” of personal finance. Now that my debt has been eliminated and I’ve developed the discipline to save for retirement, I’m ready to explore my financial priorities.

Over at Fiscal Fizzle, Wojciech has an excellent article about finding your financial heart. He lists seven activities — thought experiments, really — that you can use to obtain a clearer understanding of your financial values.

In the first exercise, for example, he asks readers what they’d do if their income were cut in half:

To enter the scarcity mindset, imagine that your total household income has just been reduced to half of today’s levels. It’s not so far-fetched, as both two- and one-income families are finding themselves partially or totally unemployed.

Create a theoretical budget based on the new income level. Unless the space between your current income and expenses is wide, you’ll really have to focus and trim down.

What would you do if you suddenly had half your normal monthly income? That’s a fantastic question, one that can help you become more attuned to your financial priorities — your actual priorities, not just the theoretical ones. Wojciech offers six additional exercises that force readers to ask questions like:

  • What if your income increased by 50%?
  • What are your Financial Defaults?
  • What’s your Most Important Charity?

Wojciech’s article very much reminds me of George Kinder’s three questions about life planning. They both seem to be saying something that I’m just beginning to understand: When you understand what you want to do with your life, you can make financial choices that reflect your values.

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