There is a sweet feeling that accompanies buying something you truly want for yourself. It’s a deep sense of satisfaction and a knowledge that this item is something you have craved. It’s something you have a use for. Something that you know will add to your quality of life.
That’s called values-based spending, and it is the bomb dot com. If budgeting is the equivalent of a money diet, values-based spending is the equivalent of a lifestyle change.
Values-based spending boils down to value. It’s making purchases that align with your values and that bring value to your life. Rather than spending money on things you don’t care about, values-based spending is a surefire way to make sure every dollar helps bring more joy and significance into your life.
If that sounds a little ‘woo-woo’ for you, pull up a chair. Because I’m about to drop some money knowledge into your life.
Are You Buying What You Care About?
Think about the last five things you bought. Can you call them to mind immediately? Do you know why you bought them, and what use they had for you? Was it food, to keep you alive and well? Was it clothing, to protect you and give you a confidence boost?
Or was it an extra notebook, because it happened to be in front of you and you can ‘always use’ another one? Maybe you can’t even remember what the last five things were off the top of your head because they were small, inconsequential things.
Well, when it comes to money, nothing is inconsequential. Every single penny you spend has an impact on the world around you. When you make a purchase, you are flexing your money muscles. You are making a statement on the type of life you want to live.
Values Based Spending-Where and What We Buy Matters
Have you heard the phrase ‘voting with your dollar’? It’s why boycotts are so successful. Hitting someone or something in the money is hitting them where it hurts most. When you decide to spend money at a locally owned business, you are saying ‘I support creatives in my community.’
When you decide to buy organic you are saying ‘I believe that there should be fewer chemicals on my food.’ That organic purchase means less money for the big food lobby, less money for the pesticide companies. You’re hitting them where it hurts most.
When you decide to spend money at a locally owned business, you are saying ‘I support creatives in my community.’ When you decide to buy organic you are saying ‘I believe that there should be fewer chemicals on my food.’ That organic purchase means less money for the big food lobby, less money for the pesticide companies. You’re hitting them where it hurts most.
On the other side of the equation is mindless spending, or buying things for any reason other than you deeply want or need them. You know that kind of spending: tossing something in the cart because it’s on sale or making a purchase to go along with the crowd.
Add Value, Save Money
I’m not a big drinker. I like to get drunk on occasion, but I’m not one of those people who loves a good cocktail on a hot summer night. I’d rather have a sparkling water with some citrus. (Basic? Maybe. Do I care? Absolutely not.)
It often makes people slightly uncomfortable when I don’t drink and they do. A lot of that has to do with the fact that in the US, we’ve assigned a complex label to alcohol- it’s fun but dangerous. It’s cool but bad. Drinking is both a vice and a pleasure. So when someone opts out, it can make some people feel guilty. ‘Hey,’ they think, ‘come indulge with me. It’s not so bad if we’re all doing it together.’
But I’m a lightweight who gets hungover on three drinks, and who genuinely doesn’t enjoy drinking that much. Going out to happy hours multiple times a week, or bonding over cocktails on the weekends is not something I enjoy. It doesn’t add value to my life.
So I’m not going to spend my money to make someone else feel better or to fit a certain identity. I use values-based spending to live the best life for me. And it has made a huge difference in my money management. I have a line for “drinks out” in my budget and it’s $25. That’s it.
The money I’m not spending on drinking is money I’m spending on travel, on savings, or on home decor stuff. I spend a lot of time in my home, and I want it to look beautiful. So having decor I love, like this mirror or a lamp similar to this one is worth the price tag to me.
When I open my wallet, it’s to spend money on something that I need, or that will bring me real joy. It’s not to keep up with the Joneses, or to distract myself from my life. Values-based spending puts control of my money in my hands.
How to use Values Based Spending
Values-based spending puts control of my money in my hands. It makes me mindful of every dollar I spend. It also helps me spend less. I check in with myself before I spend any money and I ask myself three questions:
-Do I truly need this new thing? Do I have something else that will suffice?
-Is this an item I want for a valid reason?
-Will this support systems I believe in or systems I hate?
I stopped shopping at Walmart years ago because how they treat their employees is pretty despicable. I’m not rich, but I’d rather pay more for what I need somewhere else than support their business. That is an act of values-based spending.
Mostly forgoing alcohol is an act of values-based spending. When I want to indulge, I do. When I don’t want to, I abstain. It makes my life better.
Then, I incorporate the things I do want to spend money on into my monthly budget.
I have a savings account for travel, and another one for my future home.
Going to the gym isn’t important to me, so I don’t have a budget line for the gym. I work out at home!
This is how you build your own values based budget (and we have an 8 chapter workbook to help you!) Determine your values, your needs, and the things that do not matter.
Values-based spending is simple to enact in your own life. The next time you pull out your wallet, ask yourself the questions above. Do a mental inventory of similar things you have in your life. Ask yourself the real reason you’re buying this item.
If it will bring joy and value into your life, swipe away. If it’s a band-aid for something, put that wallet away. Personal finance is personal, and money is very intimate. Take the time to examine your spending habits and create ones that help you live a life you truly love.
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4 thoughts on “Why You Need Values-Based Spending in Your Life ASAP”
I can relate to you on the alcohol issue. Lots of my friends drink often, 3-5 times a week, not necessarily to get drunk but with dinner or in a social setting. Since I’m perfectly content with and without alcohol, I just refuse to stretch my budget to include unnecessary spending on drinking. When I do indulge in a glass of wine in a social setting, I enjoy it much more because it’s a special experience for me. I do get some looks when everyone is ordering a fancy cocktail, and I’m drinking something non-alcoholic or a cheap beer, but you shrug it off. I think us challenging the “status quo” when it comes to drinking only makes our resolve stronger. Cheers to value-based spending. 🙂
Man, when hangovers started happening after 2 drinks I was like ‘great, let me save dat cash and avoid this mess.’ It definitely gets me side eye but I focus on my own goals. Let’s break the status quo and rock those non-alcoholic beverages. 🙂
Love this! The three questions to ask yourself are so helpful. I will put that into action RIGHT NOW.
Yaaaa kween! Tim Ferris would be so proud of your immediate action ?