I have written here before about how people are not robots and that earning, spending, savings and investing money is seldom done in an emotionless vacuum. Of course, that doesn’t mean you shouldn’t understand what is the “right” move according to an unemotional spreadsheet, but actually living with your money and personal finance is much more important than trying to pretend you should strive toward never doing anything but what the calculator says is right.
Spending My Values
The concept of spending your values, is not mine. I’m not sure where it came from originally, but now that I’ve heard of it from someone else, I thought it would be interesting to take a look at it, and pass the idea on to you.
When we look at spending money responsibly, the first thing we do is look at a budget, whether formally written down and calculated, or just sort of sketched out mentally. The main component of spending responsibly is not spending more than you have. After that, personal finance at its most basic level is paying your obligations in any given month, and then, determining where to spend and save whatever is left over.
For many of us, there are certain unconscious value judgements made along the way whether we realize them or not. For example, saying something like, “I shouldn’t be spending that much money eating out,” or that much money on shoes, or clothes, or movies, or whatever, comes from an unarticulated value system inside of you. After all, you are the one that determines how much spending on clothes, or restaurants, or happy hours, is “right” and how much is “too much.” If you ever examined the same ideas from others, you would likely find much different answers.
Part of this stems from what we consider to be luxury versus necessity. But, here too, there are a lot of different ways to value such things. For example, food is necessary, but one can spend more or less on groceries depending upon what is important to them. For example, I spend more money on organic milk because my children drink a lot of it, and I’m concerned about all the stuff they put in it. That makes my mile cost about a $1 more than the other milk. I’m fine with this because I feel that it is “worth it.” On the other hand, I don’t buy certain other things because they are “too expensive” even if that is what they cost.
In a real way, this is spending your values. I buy organic milk because my values say that is an important thing to do for me and my children.
But, have you ever thought about the rest of your values?
For example, a friend of mine, who brought up the concept of spending your values to me, is a big believer in the arts, in particular performing arts. Now, before, she would do her budget just like I do, with various categories of bills, gas, food, etc…
At the end, she would have an “entertainment” or “extras” category. It was from that money that she would buy things like tickets to shows or concerts. But, it dawned on her one day that those events and purchases were the most important things to her. So, she decided to spend her values by allocating more money to those types of events, than to things she valued less such as clothes or wine.
When developing a budget, tricks like spending your values are important because they give you the willpower to hold true to your budget. When the decision is between buying those boots or not is just between it is or isn’t in the budget, the decision can be tough. But, when the same decision is between valuing boots over a holiday performance at the local orchestra, well, that’s a different thought process entirely.
If you have trouble sticking to your budget, try consciously attaching your values to how you categories and spend your money. Make sure what is really important to you doesn’t end up in the “extra” or “leftover” category. It just might help you find the will to stick to your budget better.