Budgeting for Values

Budgeting gets a bad rap, dredging up fears of deprivation and misery. Maybe you immediately think you’ll have to slash every penny of fun money, or you remember your parents’ firm pronouncements that the toy you wanted “isn’t in the budget.” Maybe you still feel the shame from that time you tried to track your expenses, but fell behind and eventually gave up. Given all of that baggage, no wonder the idea of a budget weighs on us.

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Budgeting was never supposed to be that. More importantly, it doesn’t have to be that. Budgeting is not about deprivation. It is about saying “Yes!” to the things you actually want. Before we bring mindfulness to our spending, we spend on autopilot. This may seem easier, but it can really throw us out of balance with what matters. We may feel that there isn’t enough money for fun outings with the kids, but we are spending on subscriptions we forgot about or bank fees we didn’t notice. Even worse, we may find that our spending is in alignment with the values of advertisers, rather than our own. I doubt those are in perfect alignment with ours!

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As you are getting started on your budgeting journey, let’s take a moment to talk about values. You may think this has nothing to do with money, but trust me, this has everything to do with money. When we don’t spend intentionally, we drift from our values and start spending on other stuff. As we dig into our values, remember that there are no wrong answers for this. The entire point is about what matters to you, not what you feel should matter and not your parents’, coworkers’ or friends’ values.

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First, think about your core values. Many of these values may be important, but aim to find two or three that really resonate with you. These values will be your guide as you determine what deserves your money and what doesn’t. Here are some examples to get you started.

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The next step is to get to the root of what these values mean practically. What and Who matters to you? What change do you want to see in the world? What do you want your legacy to be? What brings you joy? The answers to these questions become the driving force of a healthy, sustainable budget. You want to hone in on what those values mean to you specifically, because within these subtle differences, we will find our way.

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For example, valuing “family” may mean that you don’t want to work long hours so you can spend time with your kids. It may mean contributing to kids’ college funds or taking regular vacations with the extended family. It may mean being able to temporarily quit your job to be a caregiver or it could mean leaving a large inheritance.

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“Sustainability” could mean environmental responsibility or not pushing yourself into burnout. “Ambition” could mean aiming for promotions in your career, starting your own business, aiming for financial independence at a young age, or trying to solve a complex problem in your community.

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All of this nuance is tied into successful budgeting. We can’t fund everything. We want to make sure we are funding the most important aspects of our life. If your main value is time with family, working overtime to add extra to the kids’ college funds won’t be sustainable. If you value time prosperity, buying the items that others link with financial prosperity will leave you feeling empty.

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Of course, it’s hard to mentally keep track of what percentage of our income is going to each value, whether we can afford to spend more on a category or whether we actually do need to work overtime this month. This is where the budget comes in. Think of your budget like a giant flashlight exposing every expense, both the ones you are glad to see and the ones that make you cringe.

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The first time I did a spending audit (way back before budgeting apps were a thing), I found that my husband and I were spending twice as much on fast food as the coffee dates that we absolutely adored. Many of our favorite evenings were spent in local coffee houses, reading, talking and laughing. The fast food? Well, that was just poor planning. This was an easy value judgment. We started packing snacks when we were running errands and eliminated the fast-food spending. Most importantly, we doubled the frequency of our coffee dates. It was perfect! We saved money and we got to go on more dates!

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If we had just been lumping coffee and fast food into a category named “Dining”, we would have missed this. Find the sweet spot where you are categorizing specifically enough to analyze, but not so excessive that it’s burdensome. The endless customization is one of the things I love about MyBudgetCoach. You aren’t saddled with someone else’s ideas about categories, so you can really get into the nitty gritty.

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Here’s some examples to get you thinking:

• Dining out for pleasure vs dining out because you are too tired to cook
• Subscriptions you use vs ones you haven’t been using
• Intentional shopping trips (or online purchases) for items that bring you joy vs shopping trips because you’re bored
• Household repairs/maintenance vs updating for style or from boredom
• Gas for work vs gas for general life

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Sometimes you may want to lump different spending items into categories to bring clarity. For example, if one partner is more of a clotheshorse and the other will wear those jeans until they are threadbare, lump all clothing into the personal spending categories. The partner who wants the latest fashion can buy them without guilt up to the budgeted amount and the other can spend on other items or save it for a big, fun goal. If you are supporting and treating your adult children at different life stages, you could lump each expense into a category for that child to make sure you are being fair. 

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You can also split purchases to effectively categorize. This is especially important to see what is going to needs and what is going towards extras that could be cut in an emergency. This can look like:

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• Grocery Budget 
  
  • Necessary food (Food/Grocery category)
  • Fun stuff like seltzer or snacks (Personal spending or mad-money categories)
  • Values such as local or organic (Personal spending or community categories)
  • Medically necessary items such as for avoidant/restrictive food intake disorder, Celiac, allergies, etc (Medical/Health category)
  • One partner is a foodie/the other isn’t (Portion that is reasonable for needs goes into the Food/Grocery category and the rest into the foodie’s fun money)

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• Expensive car
  
  • Payment/insurance for a sufficient basic model (Transportation)
  • Excess payment/insurance (Fun money)

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Once you have gotten into the habit of categorizing your spending appropriately for your situation, you can start to analyze it for patterns or red-flags. If you aren’t spending according to your values, don’t beat yourself up. Most folks aren’t! However, now you have something most folks never have: insight. You can now make the shift to better values spending.

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Look at your percentages or compare the amounts between categories to get a feel for the overall balance. Compare this to your working life. If you are spending 10% of your income on clothes, is it worth the 25+ days each year that you have to work to earn it? Are you really spending more on vet bills than your mortgage? In full disclosure, at times that has been me, and yes, it has been in alignment with my values.

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Compare these percentages to the values we looked at earlier. How are they stacking up? If your top value is family memories, but it is only getting 2% of your spending, how can you spend more in that category? If your community is your top value and you have some space in the budget, brainstorm where you can spend more at local businesses, invest in a local startup or donate to community programs.

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When you find expenses that don’t line up with your values, you can cut with impunity. You aren’t depriving yourself of anything of value. You are creating space for more time, less work or more to spend on things that matter to you.

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For some categories, it may help to zoom out. Who is really benefiting from that spending? If you value fair wages for workers, but find that you spend a lot on fast fashion, make an intentional choice to spend more on clothing made by folks making a living wage. If you value the arts, maybe you need to carve out some regular money each month to devote to supporting your local theatres, art galleries or symphony. If there is a business that you find unethical, it may be worth spending more to spend elsewhere.

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Each month, you have a new chance to bring your spending into better alignment with your values. You can feel good about how you spend your money, knowing that you won’t regret spending on the things that truly matter most to you. 

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