Do you carefully consider what you want to spend your money on? Or do you spend on things you think you need without a second thought?
Mindless spending isn’t going to get you closer to your goals, whether that means achieving wealth, traveling, early retirement, or being debt free. It’s only going to hold you back.
In order to regain control of your spending and get your finances in order, it’s worth it to take the time to reflect on what your financial values are.
Your Spending Will Tell You What Your Financial Values Are
“The budget is not just a collection of numbers, but an expression of our values and aspirations.” – Jacob Lew
When you look at your spending, are you happy with what you see, or do you think you’re spending too much in one area? An area that happens to be fairly unimportant to you in the grand scheme of things?
If your spending isn’t aligning with your values, you need to change that – both for your sake, the sake of your wallet, and the sake of your goals.
Take the time to evaluate your spending in order to figure out what your financial values are. Do you really enjoy going out to eat frequently? Is it your dream to travel often? Do you have a pricey hobby that’s worth the money because it makes you happy?
Create a list of values, from most important to least important. Then look back at your spending and figure out what you can do to spend more on what matters to you, and less on what doesn’t.
How to Spend Only on Your Financial Values
Cutting back on spending might be difficult if you’re not used to spending meaningfully. If you have a history of mindless spending, it’s going to take a few months to get in the groove of questioning your purchases and making sure the focus stays on your values and goals.
So, what can you do to focus your spending on your values? Glad you asked.
Say you really want to travel to Greece. You want to keep this trip in mind at all times to avoid the temptation of spending on unimportant things.
Create a reminder of your desire to visit Greece by changing the background of your phone and computer to Greece; put that picture around your cash and your credit cards; tape it to your desk at work. You want that motivation in front of you at all times!
Can you see yourself on the beaches of Greece? Take a few moments every day to picture how wonderful that trip will be, all the memories you’ll make, and how much you want it. This should reinforce your desire to go, and strengthen your resolve when it comes to spending on other things.
You can do the same if you value retiring early. Picture how glorious it’ll be to wake up every morning and not have to go to work, to be able to spend time with family, and not worry about making ends meet.
Put Your Happiness and Financial Well-Being First
By putting the focus on your financial values, you’re essentially putting your happiness and financial well-being first, which is a good thing. Do you want to be stuck spending your money on things that aren’t making you happy? Probably not!
If you’re excited about the possibility of early retirement, traveling, saving for your children’s college education, or becoming a stay-at-home parent to gain more family time, then cutting back on things that won’t get you there makes sense.
The End Goal
Overall, the purpose of spending on the things you actually value, over spending on just anything, is that you will have more flexibility in your spending. The goal isn’t to deprive yourself. Instead, you want to focus on the big picture.
If watching television doesn’t make you happy, it’s not bringing you closer to that big picture goal. You’re probably better off canceling the service, and putting the money saved toward your values and goals.
Knowing your values and what you want to spend on is one of the best things you can do to improve your financial situation. Spend and save for what really matters, and lose the temptation to spend on everything else. This focus will help you achieve your goals.