You and your best mate have so much in common: you’re the same age, earn similar incomes, live in the same neighbourhood and both have the average 2.4 kids.

So, how is it that you’re facing retirement on the pension while your friend is buying holiday homes?

The answer is differing values driving your respective decision making.

Check out these common values and how they play out financially:

1. Conservatism

Pros: The conservative like structure and plans – all great when it comes to finances. They protect their assets, such as having income protection insurance. They devise plans of action based on various scenarios. They seek expert advice and embrace self-education because they know knowledge is power.

Cons: Conservatism can equal risk-aversion. And being overly risk-averse – especially when we’re younger – limits earnings potential. The safest option often yields the lowest returns. But in our younger years, we can afford to take bigger risks. After all, we have less to lose and more time to make it back if things go sour.

2. Come what may

Pros: Those who value the notion of “come what may” are easygoing. They’re happy to invest aggressively and see what happens. They don’t scrimp and save in ways that limit their quality of life in the present.

Cons: “She’ll be right” often turns to burying their head in the sand when things go wrong. They believe things will eventually work themselves out and don’t act to stem any losses. They may also forgo insurances and protections. Their retirement is ultimately a game of luck.

3. Generosity

Pros: It’s admirable that many Aussies value generosity. They support families and friends. They give back to their community. They help strangers in need. Generosity makes the world a kinder, better place. Plus, there are tax breaks that “reward” charitable donations.

Cons: Some people are too generous to their own detriment. Especially parents giving to their children. Ironically, many of these kids earn more than they do! I’ve seen couples who go into mortgage debt to set up their adult children and then are forced to sell their own home. And those who have children earning six-figure salaries but run up credit card debts that their parents pay for – with their super!

4. Status

Pros: Status and generosity can be linked. Status seekers often spoil their family and friends with luxurious gifts and lavish holidays. They’re also ambitious, hard working and sociable.

Cons: A champagne life on a beer budget means living well today at the expense of tomorrow. Brand names and flashy cars don’t come cheap, plus they’re unlikely to be assets that will increase in value over time.

5. Control

Pros: Taking ownership of your finances is highly encouraged. Knowing where your money comes from and where it goes empowers you to optimise spending and saving, and make your money work hard for you.

Cons: Control can go too far. Control freaks will go down with a sinking ship rather than admit they’re wrong. They can lead their partner into strife by dominating joint decisions. They may also avoid external advice – because in their mind they’re right anyway, so why pay someone to tell them that?

Are your values aligned?

While opposites attract in love, opposing values between couples can spell difficulties when it comes to building wealth.

One of you may want to save Africa from poverty and disease while the other wants a new BMW. You may strongly value property while your partner places a higher value on shares.

Gender plays a part, too: I find women tend to be more conservative than men when it comes to money.

No matter your personal values, you can build wealth and retire comfortably. But understand how those values impact your decision making and whether you and your partner are a united front. It could be the difference between retiring on champagne or beer!

Helen Baker is a licensed Australian financial adviser and author. 

Note: This is general advice only and you should seek advice specific to your circumstances.

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