Do You Have Financial Purpose Or Do You Just Manage Your Money?

Steven Covey makes an important distinction between leaders and managers.

Leaders are those who have vision and direction.

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Managers simply master the art of doing ‘it’ better and more efficiently.

Covey offers the following illustration:

The managers are those who are finding better swinging movements to cut more branches with less effort while the leader is the one climbing to the top of the tree to see if they are in the right forest and to see if they are heading the right direction.

The manager might race to figure out how quickly she can climb up the ladder while the leader checks to be sure the ladder is in the right place before attempting to climb.

Too often our time and energy is spent trying to do money management.

We simply try to do the money thing better.  We want to maximize our investment on return, find the best savings account, learn how to cut a few more dollars from our budget.  But at some point we need to take a break from our busy money management and ask – what is the purpose of all this?

Your financial purpose helps you be sure you are doing the right thing with your money – not just the most efficient thing with your money.

4 Reasons To Discover Your Financial Purpose

1.  To Have Clear Financial Goals

Wouldn’t it be a great feeling to be ‘on track’ financially?

It is impossible to know if you are on or off track until you have first looked ahead to decide on some financial goals.  Once you have financial goals in place you can now set some goals along the way to help you track your progress.

When you have financial purpose you can lead your money according to your goals.

2.  So You Can Find More Satisfaction In Your Interactions With Money

At times we wonder – what is the point of all this?

Why should I save this or spend that?  We fall into a pattern of money management depression.  We find that budgeting is a waste of time.  There is no point in tracking our spending.  This indicates that you are just managing your money.  You have no sense of direction or purpose.  If, however, you establish a clear financial purpose those accounting and money management tasks become tools to help you accomplish your financial goals.

When you have financial purpose you will find more satisfaction in your interactions with money.

3.  You’ll Have Emotional, Physical, and Spiritual Peace

When you accomplish something, you typically feel a tremendous amount of satisfaction.

When people decide to diet and start to lose weight they often talk about how it impacts them both emotionally and even spiritually.  There is something satisfying about accomplishing goals.

When you have financial purpose you will experience emotional, physical, and spiritual peace.

4.  You’ll Get To Help Others More

Giving rarely happens unless it is intentional.

The wait for “enough” is a loooooong wait.  In fact, if you cannot give today I suspect you will find it hard to give tomorrow – no matter how much you make.

When, however, you have a financial purpose you can intentionally decide to bless others based on what you have.  A classic example of this is the graduated tithe.  The graduated tithe gives you a direction and a purpose even for money that you are yet to earn.

When you have financial purpose you have a wonderful opportunity to help others.

Take Advantage Of The New Year To Set Some Financial Purpose Goals

For a moment step back and commit to looking at the big picture.  Don’t just try to make an extra $1,000 in 2010. Rather decide on a legitimate purpose to make an extra $1,000.  If, for example, you want to make some extra money to pay down debt, each dollar you earn can then be used according to your financial purpose.

Set some larger, long-term goals to give purpose to your money management and you will find the mundane financial tasks will be easier to mange.

Get out of your financial rut.  Stop merely managing your money.  Its time to lead and find your financial purpose.

What are you striving for?  What is your financial purpose?  Any goals for 2010?  Tell us yours in the comments!

Last Edited: 22nd December 2009

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  1. says

    Great post, Craig. Couldn’t agree more with the need for a purpose behind our financial goals. I think that one important purpose of money is to manage it in a way that strengthens our most important relationships. In the New Year I’m striving to make our finances more of a team effort. My wife and I talk about our financial goals, but I tend to be the one who looks at our budget and sees how we’re doing. I think some regular (at least quarterly) “board of directors” meetings will be good for our finances and our marriage.
    Matt Bell´s last post ..Resolving to Get the Money Thing Right

  2. says

    Let me start by saying that we need both types… leaders and managers. It’s kind of like the church body, being made up of many different parts, it functions together in harmony.

    Beyond that, I think it is uber important to set financial goals and then to follow through on those goals.

    For me… I’m the visionary type that Craig highlights in this post. It is easy for me to have a vision of what needs to be done, and I have done that. What I am working at mastering is the beautiful art of faithfully and consistently managing that vision through completion.
    Matt Jabs´s last post ..Debt Help – The Lending Club DebtBuster Challenge

  3. says

    Purpose behind our money is one of my favorite topics! We all have a purpose for the money we have, but we may not have it directed correctly – in other words for some, their purpose is to bring them happiness or to have the most toys etc.

    When we our purpose moves beyond ourselves and to the greater good, then we are on to something. Paradoxically, giving away our money actually brings us more happiness and in many cases more money as well.

    Great point about giving needing to be intentional – that’s so true. We so often wait for the money to be there to give and then realize that there is always something else we find to do with the money!
    Jason @ Redeeming Riches´s last post ..10 Frugal Gift Ideas Under $10

  4. says

    One simple way to have purpose for money is to have an account for specific things. I have a Christmas Club Account that is solely for Christmas and I deposit to it every month of the year.
    Ken´s last post ..How to Finance Fun

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