Values-based spending: the key to financial contentment?
Values-based spending is the idea that how you spend your money (particularly your disposable income) should be in alignment with your values and how you want to live your life. Simply put, the life you create around you should look like the life you create within you. When the reality of your life is contradictory to your values and beliefs, you may feel some emotional or mental distress. Being intentional about spending is just one way to bring alignment and cohesion to our lives.
This is why in my family, we spend a lot of money on memberships to our local Crossfit gym. We love the sense of community we feel there, the opportunity to move our bodies, and the ability to work towards strength and other fitness goals. Paying our membership every month feels right, and we’re happy to do it. In contrast, we don’t find much value in upgrading certain electronics- our TV is over ten years old, and still working. Sure, we could upgrade to a newer, bigger model that would have a clearer picture, but I don’t think it would change our experience of watching TV all that much. To me, spending on a new TV wouldn’t be worth it. At least not until ours stops working.
Obviously, when I’m talking about aligning spending with values, I’m talking about discretionary spending. Some things we just have to spend money on, even though it doesn’t feel good at the moment. Gas, utility bills, and medical bills all come to mind. But by focusing on where we’re spending our money when we do have a choice, and what we’re getting out of those spending decisions, we may find that we actually have more money for the things that bring us joy because we’re spending less on the things that don’t.
Here are a few exercises to help you determine if your spending is aligned with your values, and what to do if it’s not.
Review spending habits
This first exercise is probably the one that most people would rather avoid. Even if it’s uncomfortable for you, I strongly suggest that you take a look back at your last 3 credit card statements to see where you’re spending money. By actually looking back at what decisions you’ve already made, you’ll be able to see your true spending habits.
What do you see? What stores do you frequent? Which restaurants do you support? Take note of how you feel as you review your spending. Pay attention to feelings of shame, regret, or disappointment - those feelings are telling you that your spending was out of line with what you value. What don’t you see in your spending? Are there areas in which you’d like to be able to spend in ways that you’re not doing currently?
Hone in on your values
Take 10 minutes to consider the following questions. Open up a blank note or document, or take out a piece of paper and a pen to write down your thoughts. Try not to judge yourself or write what you think you “should”. Just answer with what comes to mind first.
What’s important to you in your life right now?
When do you feel satisfied and fulfilled?
What do you have too much of in your life right now? What do you need more of?
When do you feel dissatisfied?
Make a plan
Now take a step back to consider your finances. Are you spending in support of your satisfaction and fulfillment? Does your spending support what’s important to you? If so, great! If not, write down 3 small steps that you can take to bring your spending toward that goal.
For example:
I enjoy eating out and like to think of myself as someone who supports small businesses in my community. But, looking through my spending for the last few months, I can tell that when I did eat out, it wasn’t at local restaurants, but rather at chains. For the next month, when I eat out, I want to spend my dollars at local restaurants that I enjoy.
Or:
I noticed when I reviewed my spending that I bought 3 lipsticks last month. I’m not even wearing lipstick much anymore because I’m wearing a mask all the time, and I don’t think I’ll be able to use these before they go bad. I don’t want to be someone who buys things that they won’t use, or who wastes what I do have. I’m not going to buy another lipstick until I finish at least one. If I do get an urge to buy a new lipstick, I’ll remind myself of what I already have. I can make note of what I want to buy for the future.
By taking small steps like these you’ll be able to slowly align your spending with your values, freeing up more money for what’s important to you. It’s my hope that along the way, you’ll feel more at ease with your money and your spending choices as well. If you try it, comment below to let me know how it went.