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Writing a Financial Mission Statement

by Ryan Guina

Do you struggle with financial decisions such as how much to invest, paying down debts, spending money on entertainment, or other items? Do you and your spouse have problems communicating what is important to you when it comes to your finances?

If this sounds familiar, then you need a financial mission statement.

What is a financial mission statement?

A financial mission statement is your household’s plan to help you reach your financial goals. At the minimum, it should reflect your goals, visions, and philosophies. A well-written financial mission statement will convey what is important to you and whoever helps you manage your money. It will act as a roadmap to help you quickly and easily make financial decisions that you previously may have wavered over or argued about. A good financial mission statement will state where you want to be, and how you will get there.

How to write your financial mission statement

Before you sit down in front  of a blank sheet of paper, it helps to have an idea of what you want to accomplish financially. You may have a hard time sitting down and writing a coherent document from scratch in one sitting, particularly if you manage your money with another person. I recommend having an open discussion about your finances, values, goals, hopes, and dreams before writing your mission statement. It will make your job much easier to accomplish.

On style and length. Before we go further, I should note that there is no right or wrong way to write a financial mission statement; write what is important to you, and in a format that works for you. However, it should also be noted that the most effective mission statements are concise. Your mission statement will have a greater impact and motivating factor if it is easy to remember and communicate to another person.

Put thought and discussion into your financial mission statement

It is important for everyone involved to be on the same page before you start writing your financial mission statement. What one person may consider trivial could be extremely important to another individual. Before putting pen to paper, talk about your goals, dreams, etc.

Keep in mind this important fact: we have a finite amount of money at our disposal. That means you need to make decisions based on your needs, wants, and priorities.

Do you want a huge house, or are more affordable house payments and more frequent vacations more important to you? Do you want a luxury car, or would you prefer to have more money in your retirement account?

You can’t have it all, but you can have a lot if you plan for it.

What should be included in your financial mission statement

Your mission statement should reflect your values and address the purpose, goals, and principles that guide your decisions. Most missions statements should address at minimum, these three topics:

  1. Purpose or opportunity
  2. Plan of action (how you will address the opportunity)
  3. Values that guide your actions

For example, if your goal is to build wealth you would want to create a mission statement with the “purpose of building wealth by maximizing our retirement plan through monthly contributions in investment opportunities that reflect our beliefs.”

If your goal is to get out of debt, you might consider writing something along the lines of “The Smith family goal is to completely eliminate our debt by the year 2013 by aggressively making extra payments to our creditors and still maintaining a strong quality of life.”

Obviously you can fill in the blanks by adding more detail or including the next stage goal as well, especially if it helps motivate you to continue with your present course of action. For example, “pay down our debts so we can begin aggressively saving for retirement/home purchase/vacation, etc.” Adding a timeline or other specific details is a great idea and can help you keep on track by giving you something to measure.

Write it down, but don’t be afraid to change it as your needs change

Your financial mission statement should be written down so you have a physical reminder of your goals and an agreed upon plan of action. Conversations are easily forgotten, and sometimes it is easier to make an empty agreement than it is to face difficult decisions head on. The physical reminder of your financial mission statement gives you a something to reference when you aren’t sure what to do and it helps make the decision making process easier because it will automatically eliminate many of the possibilities from consideration.

But a written document doesn’t mean it is written in stone. Your needs, wants, and priorities will change as your life changes. What was important to you a year ago may not seem as important to you or your spouse now. Major life events may dramatically change your situation. The birth of a child, job loss, an inheritance, starting a business, or other major events are all great reasons to take a fresh look at your financial mission statement and adjust it to your new situation.

This is your statement

Any guidelines and tips I offer here are just that – hints to make it a little easier to get started. And getting started is the hard part. But once you open those discussions and determine what is important to you, the rest is easy. Create a financial mission statement that meets your needs, and the rest will take care of itself.


Published or updated February 24, 2010.
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{ 5 comments… read them below or add one }

1 Ryan

Excellent article. I have a financial mission statement in place for a home purchase I’m working toward.

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2 Kristine

Awesome post! I agree that having a financial mission statement helps to keep the big picture in mind at all times. Sometimes it is easy to get sidetracked with an investment that promises huge returns, but it is not in line with our purpose or values. Then, if things go bad, we’re not ready to deal with the consequences. Thanks for the post!

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3 Monevator

A mission idea is great idea for anyone, whether they’re starting out in saving and investing for the future, or they’ve been doing it for a few years and are potentially drifting away from their original goals.

Something else readers may want to consider is writing a job letter for themselves – as if they were their own employer. Put in all the requirements and benefits of your role. It makes you remember who you’re really working for (you!) and is especially useful if you’re a freelance or contractor, but it also works for anyone with a career.

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4 Monique

This was a great read. Thanks for the advice.

This post is a top pick for me this week at http://www.moniquesbirthdaywish.blogspot.com

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5 Full Disclosure

Great information! I have a personal mission statement but I never thought to make a financial mission statement.

Thanks for sharing!

Full Disclosure Moment
fulldisclosuremoment.com

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