Why Values Outweigh Budgets in Personal Finances

Have you ever struggled to stick to a budget? Maybe you downloaded an app, set the categories, but then didn’t know what categories to put things in!

Or maybe you set it all up, but STILL went over budget each month?

Or maybe your budget just made you feel guilty when you spent money?

You’ve probably heard that budgeting is a foundational piece of financial wellness.

But I’m going to teach you a different approach to spending and saving your money – one that makes managing your money feel intuitive and will help you develop a more positive relationship with your finances: values-based spending.

What Is Values-Based Spending?

So let’s get into this budget alternative. It’s called values-based spending.

Values-based spending is a money management approach that aligns your spending habits with your personal values and priorities.

Instead of simply trying to stick to a budget, values-based spending encourages you to consider what truly matters to you and then allocate your resources accordingly.

Values-based spending isn’t just about “saving money”; it’s about changing your relationship with money and bringing more thoughtfulness to how you spend.

I’ll give you some steps to start values-based spending in a minute, but first… let’s talk about why values-based spending feels so much better than budgeting.

Why Values-Based Spending?

You may have said it was difficult to keep up, felt overcomplicated, hard to track, impossible to account for unexpected expenses, or just felt plain restrictive… whatever your reason for not budgeting, I GET IT! It’s hard!

So, let’s talk about the pros of values-based spending instead:

1. Feels less restrictive

Values-based spending is a personalized approach to spending that you can tailor to your unique situation, rather than forcing things to fit in categories.

2. Aligns with your personal values

This approach encourages you to spend money on things that truly matter to you, so you can feel like your spending is in alignment with what you care about.

3. Leads to less guilt and shame

When you spend money in line with your values, you feel good about your purchases instead of guilty every time you pull out your credit card.

4. Allows you to focus on long-term goals

By aligning your spending with your core values and long-term goals, values-based spending can help you make more intentional choices about how you use your money. It encourages you to consider the bigger picture and how your spending habits impact your overall well-being and happiness.

How Can You Start Values-Based Spending?

Here are 5 easy steps to bring a values-based spending approach to your financial life. But first, if you’re digging this video, would you give it a thumbs up so you can help other people find it? Okay step 1…

1. Identify your core values

This one was probably obvious! The first step of values-based spending is identifying your core values. These could include things like family, health, personal growth, creativity, adventure, freedom, environmental sustainability… you tell me.

As you do this, think about what your perfect life would look like. How do you spend your time? How do you feel? What’s your financial situation? What makes you excited to get out of bed in the morning?

As you reflect on those questions, ask yourself if your current spending and saving habits align with your dream life. If they do, that’s great! If they don’t, you’re gonna wanna move on to step 2.

2. Align your spending with your values

Now that you’ve clarified your life vision, before you make a purchase, take a moment to ask yourself how this fits into the bigger picture of your life. How is it propelling you toward your goals and your dream life?

3. Make intentional financial decisions

With a clear understanding of your values and your spending habits, you can begin to make more intentional choices about how you use your money.

This might mean changing your spending habits - maybe you decide to spend less on take-out because you value health, and instead you buy meal-kit boxes so you can learn how to cook?

Or maybe your value of quality family time has you cancel your TV subscription and opt for evening game nights instead?

4. (finally) Track your spending

A great way to see if you’re spending in alignment with your values is to review your finances during a weekly money ritual.

A weekly money ritual is an hour that you set aside each week to manage your finances. You can use this time to look over your expenses from the last week and make sure that everything is aligned with your values.

During your review, if you notice that you bought something that doesn’t align with your values, decide if you want to return it, stop buying it in the future, or possibly find an alternative that is more aligned with your personal values.

Want to Make Money Management Even Easier?

So that’s it - those are 4 steps to help you start using a values-based spending approach.

Remember, it’s easier to start with your priorities and your values and let those shape your spending decisions instead of trying to fit your spending decisions into categories that don’t work for you.

I love a values-based spending approach because it gives you more freedom and makes managing your money less stressful.

If you want to learn more easy, pain-free ways of managing your money, check out our free masterclass!