What is Your Financial Purpose

What is Financial Purpose? 

By, Erin Papworth, MPH | 8 October 2020

At Nav.it we speak a lot about your relationship with money and your mindset. How do you feel about your financial situation? Are you cycling through negative emotions like anxiety and fear or are feeling calm and in control? How can you use mindfulness in your approach to spending, saving, and investing?  We also discuss the difference between a scarcity mindset versus an abundance mindset.  Do you run from the idea of money and risk, or do you embrace it as part of the natural order of human existence?

We also acknowledge your mindset is just the starting point.  It’s critical but once you’ve practiced the art of a growth mindset, and you feel comfortable with the basics of how the money system works, you will see how literacy and confidence allow you to really explore what you want from your money. 

This leads you to more philosophical questions about your intention and determining your financial purpose.

Purpose defined.

To truly understand this concept, I felt like I needed to go back to the basics. According to good ol’ Webster, purpose (noun) is defined as “the reason for which something is done or created or for which something exists.” As a verb, purpose is “one’s intention or objective.”

I thought both were interesting from the lens of personal financial management. Based on these definitions, it makes sense to me that as a noun, the purpose of money is as a tool that supports your existence. Money feeds you, helps you pay for shelter, and it gives you physical and emotional security on a daily basis. Then as a verb, the purpose of money is the intentionality you have when spending or managing your money.  You are never stagnant in one definition and having both definitions actually gives you a lot of freedom because managing your money is both necessary for survival and a representation of you in the world.

A global perspective of financial purpose.

In the early days of my career, I lived in financial systems that were not as functional as the United States. I spent 12 years working in humanitarian aid and behavioral science in developing countries. In those contexts, financial purpose functioned as a noun. The purpose of money was to help people eat and survive as humans, always aspiring to earn enough money to be able to give the next generation a better future. As a fundamental element to the human experience, we cannot deny in most contexts around the world, the primary purpose of your money is to support your survival, your well-being, and help you build a wealthy future. 

If we are lucky enough to move from survival into more affluence, financial purpose then migrates to be a verb.  Hopefully, it also gives us an opportunity to delve deeper into our own self-reflection as we start to focus on the intention and objective of what we do with our money and our abundance.

Spending is impactful.

Your intention with your money, whether it’s a shopping spree that assuages otherwise unrelated angst about your big presentation, or the moral decision to focus on social impact investing, has a reverberating impact in society. It is hard to see three degrees away from where you spend those dollars, but your money acts as an emissary of you and your approach to life nevertheless. 

There is a whole beautiful network of chain reactions when we spend money. The purchase of your favorite Napa wine reduces your account balance, but most likely supports a family business and their employees. The minute you swipe your card or plug them in online, the merchant, the card processors, acquiring banks, and your bank engage in a complex web of interactions that fuel the financial system and make a lot of companies money. Social impact investing gives capital to businesses looking to meet quarterly earnings or spend on innovation and research. Even the most generous among us are most likely not donating dollar for dollar the same amount that we are spending or investing on an annual basis. Thus, one could argue, the social impact of purchases and investing is more powerful than the amount we give to charity over the course of our lifetimes.

That includes where you bank. The banking system inherently circulates money in ways that seem opaque but we know have a lasting impact on local communities.  Since most banks receive deposits from depositors (us) and loan out that money in various ways, the money that is perceived to live at your bank is actually being loaned out into communities and has a direct social impact. Since it’s a highly regulated industry, you can look up your bank’s methodology, how close to home they invest your dollars, and who are their preferred borrowers.  (Might deposits is my favorite site to do a bank deep dive if your interest is piqued).   

Spending your values.

If this is a new concept, don’t be disheartened. It takes a while to be confident enough in your money moves to then contemplate how those money moves are a mere reflection of the way you show up in the world.  If you want a good challenge, take a moment to look back at your transactions and reflect on where you spend the majority of your money. Inevitably, you will start to see your priorities and trends regarding where you move your dollars.  

Evaluating your spending.

As I personally did this exercise, I could essentially lump the top-line categories into three buckets. Contributing and ensuring my son has a safe, healthy, educated, active, and enriched life was my number one spending priority.  That means all the enrichment things that an affluent life in this country can buy within my financial constraints. I don’t have him scheduled 12 hours a day, 7 days a week, but language, sports, travel (back when we could, sigh) and art are all things I’m willing to invest in periodically for his overall development. (Check out our guide for financial resilience and parenting here.)

After that, in priority terms, it is a close tie between funding my business, of which I feel very passionate about and believe contributes to societal advancement, and investing in my own personal health. That comes in the form of the healthiest food I can find and self-care experiences when I feel like I can afford them. Let’s be real, I spend a lot of money on food and I love my Peloton.  My son is a strong, growing 9 year-old boy, often with the appetite of an adult man, but the truth is that since I was diagnosed with celiac disease I have had a long and arduous journey to find a balanced and healthy diet. It’s part of my journey and my personal “purpose” or objective to prioritize my health is reflected in my spending habits.

While my future retirement and his college education are on the list, as an entrepreneur you are always doing a cost-benefit analysis as you invest the (often stretched) resources to fuel your dream.  Finally, I still do have the pet causes that I believe in and fund through donations that are very specific to my journey.  That is how I show up in the world with my financial purpose right now. I do my best to support local grocers and farms, think about environmental impact as I make decisions, but I am also a busy working parent and act out of convenience and compromise at times. We have accounts at the local credit union and my son’s saver account gets a better rate of return then he could otherwise, while our deposits support sustainability, affordable housing, and local STEM scholarships.

Spending, like purpose, evolves.

I also know my financial purpose will change as I move through different phases of my life. My business will either succeed or pivot, my son will grow up and need to establish his own financial purpose. I may move. I will stay active. I will retire someday and focus on establishing a meaningful contribution to society as I age.

While financial purpose seems like an abstract concept, taking the time to reflect on where you distribute your hard-earned cash is an excellent method of self-discovery to determine how you show up in the world. I am a mother, an entrepreneur, a woman, a traveler and a daughter. I believe my money represents me and is yet another little piece of power I have to influence the world around me. I want to make it count.

So what is your financial purpose? 


We’re changing the narrative around money but change can’t happen with a one-sided conversation. Send us an email and let us know what you think. And remember the nav.it money app offers you free tools for checking in and managing your money moves.

You can download it at Google Play and the Apple Store.

Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.

More Stories
Covid-19 Survival Kit