How to Align Your Spending with Your Values in the New Year

Prioritize Your Spending

As 2014 comes to an end and a new year approaches, it's only natural to think of what goals you can set to accomplish in 2015.

Many people look to improve their health and wellness, or come up with a plan to learn a new skill or see a new place. But the start of a new year is also a great time to evaluate your financial life and reassess your values.

Not sure where to start when it comes to setting money goals and making important changes to how you think about and manage your finances? There's a lot you could do and much depends on your specific situation: you could plan to accelerate your debt repayment, or build a bigger emergency fund, or finally take action and get with a financial professional to help you achieve big things with your money.

But there's also one specific, and simple, thing that we can all work to do with our money in 2015. 

What Does It Mean to Align Your Spending and Values?

What does that mean, anyway? Making sure you're spending on what you value means that you make room in your life and your budget for what's important to you -- and you eliminate extraneous expenses or what you don't value.

That's easier said than done, because there's a lot of pressure on us to value certain things over others. That whole keeping up with the Joneses thing? That's pressure that says the size of your house, the kind of car you drive, and what clothes you wear all matter; that's what's important.

But that may not be what's important to you. That's just what someone else says, and to align your spending with your values you need to dig down and understand what it is that you do value.

Perhaps it's traveling the world -- so you're willing to drive around a 20 year old car with no A/C rather than spend on a new one, because you want to reserve the money you spend for your trips.

Perhaps you value being able to enjoy certain events, like live theater performances -- but you don't care anything about technology, so you don't worry about buying the latest and greatest gadget.

Perhaps you find financial independence the most important thing in your life right now -- so you focus on achieving that goal rather than spending your money on new clothes, home decor, or going out to eat every other night in order to put your money toward what you value.

These are just a few examples. Take some time and have a heart-to-heart with yourself. Think about what's truly important to you, and what's not important. This will give you an idea of how you should align your spending with your values in order to feel happier with your money and with what it does for you.

If you need a bit more help in figuring out the whole spending on values thing, consider these ideas, too:

Invest in Experiences, Not Things

It's hard to avoid the constant barrage of information and images that showcase what other people have -- and may highlight what you don't have -- in our social-media obsessed world.

And it’s tempting to want to keep up and buy more. Although it's a cliche, the saying "money doesn't buy happiness" is exactly right in the context of buying things. You might feel a temporary surge of happiness immediately after a purchase, but material things usually end up making us feel crummy.

Instead of focusing on stuff, invest in experiences. Experiences like travel, dinners with family and friends, a concert, a hobby, and so on can leave a lasting impression, improve your happiness, and enhance your relationships.

In fact, it's proven that money spent on experiences, rather than more stuff you don't actually need and will probably forget about in a few weeks, does make you happier.

Create Systems for Success

Aligning your spending with your values takes some work, even after you understand what those values actually are. Distractions and temptations to splurge on something you later regret parting with your money for are everywhere.

So how do you do this, consistently and over time? Create systems that support and motivate you.

In order to keep your values in the forefront of your mind, consider writing them down and posting them on the fridge or a mirror. For example, your list could be:

  • Travel
  • People
  • Learning
  • Good coffee and conversation
  • Biking

Once you have something written down, you set an intention. That helps keep you on track and motivated to achieve this goal of better utilizing the money you spend.

You can even create visual reminders through a platform like Pinterest and pin things that inspire you. Whenever you feel like you need a boost, peruse your images and be reminded of what you value and why.

You can also automate the process through targeted savings accounts and automatic contributions. Create a savings account specifically for travel, or dinners out with friends, and automatically contribute a percentage of your salary each month.

The main point is to make it automatic, which helps put your spending in alignment with your values -- without any extra time or thought on your part!

Do an Emotional Audit on Your Spending

Still struggling to get the hang of spending your money in a way that matches up with what you really find important in life? One surefire way of aligning your spending with your values is by doing an emotional audit on your spending.

Start by tracking every expense, and write down how it made you feel. You can do this with a happy face or sad face, or words like good, bad, necessary, or impulsive. This is an important part in the process as it allows you to think about your relationship with your spending.

At the end of one month, you’ll start to notice a pattern in your spending. Sometimes you may think that you are spending on your values, but after seeing all of your expenses in front of you, you may realize the majority of spending is happening elsewhere.

After a month, take a look at what you wrote next to each purchase. Cross out items that are not part of your values and see what is left.

This exercise can help put your spending and values into perspective, and open your eyes to what changes you may need to make.

As the new year approaches, use these tips to to create a new financial plan based around your core values. You don’t need to buy things to impress people, or keep up with the so-called Joneses.

Spend money on things that add value to your life and your relationships. Using this method, you can use money as a tool to achieve your goals, and enhance your overall wellbeing.

How do you plan on aligning your spending with your values in 2015? Making these big lifestyle and mindset changes can be hard, but help is available. Use our Find An Advisor portal and get the right financial professional in your corner.

 

Good Financial Reads: Financial Considerations During the Coronavirus Pandemic Good Financial Reads: Financial Considerations During the Coronavirus Pandemic
A Millennial's Guide to a Recession A Millennial's Guide to a Recession
Good Financial Reads: The Coronavirus Pandemic Good Financial Reads: The Coronavirus Pandemic
Reflections on a Fearful Market Reflections on a Fearful Market
Good Financial Reads: Financial Wellness Good Financial Reads: Financial Wellness

Subscribe to Email Updates