You have any right to guard your hard-earned money. You’ve worked hard for it, taken risks and waited a long time to build your nest egg. But for what purpose? Let’s evaluate how to have a purpose with your money.
How to Save Your Money with a Purpose
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Building your wealth is a long haul. It’s a marathon. But what does it matter at the end of the day?
How will you leave your legacy? Building wealth for a purpose is how you can ensure that your money and wealth leave an everlasting legacy.
We only have so much precious time on our planet earth. You are never too young to think about your purpose with money.
Once you start making more money, you’ll need to have direction about what is the true meaning of wealth and where should it go.
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There is so much more to making money to not have some sort of everlasting meaning to it.
What is purposeful money?
With purposeful investing, we are beyond building wealth. We assume that you know how to build wealth effectively. But now you are in the planning stages of how you can leave an everlasting impact.
Leaving your legacy is not just for the uber-wealthy. It really doesn’t matter how much money you have.
Even the smallest sums of money can leave a purpose for your family and others.
Purpose with your money means purpose with your life.
It’s a true act of character to show what type of person you are, including the true motivations that you have in life.
Ways to Have a Purpose with Your Money
It’s never too early for you to think about your purpose with money.
There are a few ways to use your money with a purpose, which include:
- Leaving money behind for your family,
- Invest monetarily for an impact,
- Charitable giving,
- Helping others.
I know I want to leave a legacy. You can do all the personal financial planning you want, but what does it mean if you won’t leave an everlasting impact?
What about you? How do you want to leave an impact on others?
See Related: How to Become Financially Literate
1. Estate planning – how to leave money behind for your family
This is one of the most important purposeful resources for your money. Leaving a legacy and opportunity for your family. It’s a core piece when you start a savings plan.
My goal is to leave money to my family to help them live better lives than I did growing up.
Estate planning is an important consideration for anyone.
First, there is a qualitative consideration that needs to happen that requires some long and hard thought, which requires answering questions such as who will take my hard-earned money when I’m gone, should my entire extended family receive proceeds, etc.
Secondly, there is quantitive planning which requires how much should be left for family and to whom.
This should be done in your 50s, if not sooner, because these decisions may evolve over time and the sooner you have a discrete plan the better.
Plus if you are getting close to your 50s, you are likely making very good money and approaching retirement.
You will need to think about how your money is allocated today and how it will be allocated to your start tomorrow.
Your estate plan should include at a minimum:
- Living trust
- Living will
- Health care directives
- A financial power of attorney
- Life insurance considerations like these questions to ask for life insurance
To get started with your estate plan, you can work with a local attorney to draft documents that will cover things like your living will, a living trust, health care directives, financial power of attorney and the other components of your estate plan.
These are pretty common plans and there is likely a local attorney in your area that can help get you started.
See Related: Why Your Debit Card Declined (And How to Fix)
2. Investing for Impact
Impact investing has grown extraordinarily in the last few years as companies like Warby Parker, Tom’s shoes and other online businesses have made it a point to have to give be a part of their mission statement.
There are several ways that you can invest for impact to ensure your money is deployed with a purpose.
- Invest in renewable energy
- Limit involvement with fossil fuel companies
- Focus on sustainable living
- Invest in companies that provide a mission statement for impact
- Work with philanthropies that offer solutions to social issues
I love how impact investing has evolved over the years. You can’t always expect a massive return because some companies sacrifice profits for social good.
If you have money to spare and want to leave a legacy, I don’t mind leaving wealth for someone that is leaving it for generational well-being.
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3. Charitable giving
Charitable giving feels like it’s on the rise. With a number of massive billionaires committing to the Giving Pledge, an act of philanthropy where some of the most wealthy families in the world are giving up a majority of their net worth back to philanthropy.
It’s a great effort and an outstanding commitment. There’s still more work to be done.
You don’t have to be uber-wealthy to leave an impact on others with charitable giving.
Once you’ve made money at a comfortable level, I suggest that you start giving a set amount of money (within your budgetary means) each year to charities you care about.
For me, this is an aspect of my life that I would love to contribute more to. There’s so much beyond creating wealth for yourself.
You should think about your family, of course, but you should think about who you can help complete strangers in need or the environment.
Here are a few charities that I’d like to give back to:
- Climate change initiatives
- Helping combat homelessness
- Charities focused on mental illness and suicide prevention
- Cures and research for Alzheimer’s and dementia
I plan to stay accountable for these initiatives and to the extent Financial Wolves can develop along with my strategic plan, I promise to give back to those in need.
What is important to you? I challenge you to make a list right now of what moves you.
Go make a donation of $20. It doesn’t take much time to do.
If you change your mindset about giving, you’ll have a different mindset about making it too.
How does donating and giving fit in your savings plan? Use a free income and expense tracker to see how much you can afford to donate.
See Related: How to Live Without a Job
4. Helping others through your time and resources (beyond giving)
Do you know the saying time is money? It really is. If you don’t have the means to give back financially right now. You can always dedicate your time to help others.
If you do have the financial capacity to give back with money, you can also provide time to others to improve.
Here are several ways to have a purpose with your time:
- Become a mentor for others
- Teach or provide advice on a volunteer basis
- Volunteer at various charities
Time is money. If you can spend your time, you are in effect giving back financially to those in need. If you’ve built something important to you, go out and find someone to mentor.
It’s a great way to find the inner well beings of life. You can find happiness in talking through objectives and goals to become a better person while helping others along the way.
There are other ways that you can give your time, like charities.
It’s a great way to travel the world while also giving back to communities in need like helping solve world hunger issues or the water crises.
See Related: 16 Helpful Pieces of Financial Advice
Ensure you deploy your money with a purpose
If you can make decisions today that will result in optimal outcomes for the future in a sustainable manner. You will be in great shape.
Every time you make a new investment or save a dollar. Keep your purpose in mind.
You simply don’t know where that money will take you.
Why is investing and saving your money for a purpose important?
See Related: Get Free Books By Mail
Conclusion on Having Purpose with Your Money
On certain days, money can feel like the most important aspect of your life. It really isn’t. The American Dream should be about passing along a legacy. Not hoarding more wealth than you can ever spend in your life.
Think about the steps you need to take to ensure that wealth and well-being are being passed along for generations and not just decades.
You can do a lot by leaving a legacy that pays dividends beyond your time on Earth.
“Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful… that’s what matters to me.”
― Steve Jobs
Monitoring your cash flow and net worth for free with Personal Capital to help you plan how you should have a purpose with your finances.
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Financial Wolves is a blog focused on helping you make money to achieve financial freedom.