Why and How to Start Value-Based Spending

One of the easiest ways to spend less money is to only spend money on things that really matter to you. Read why and how to start value-based spending.

This post is not personal financial advice, simply information and an idea you can research more.

Dear Spirited Earthling,

Intentional living is an active approach to life because you are engaged in what you are doing. Being intentional with saving and spending money, or value-based spending, allows you to focus on the things that really matter to you. You are choosing to go for your dreams and goals, and not be distracted by adverts telling you to buy things you don’t need. Value-based spending builds on the idea of making money for your why and not just to make more money.

What is Value-Based Spending?

Value-based spending allows you to buy what you want and live a wonderful life while preserving financial goals. You are aligning your spending with your most significant values. Value-based spending is not paying for things that don’t bring value to your life. This spending concept may require saving for larger purchases. Having a low-buy year can complement the value-based spending process.

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” ~ James W. Frick

How to Start Value-Based Spending

Your needs (housing, groceries, transport, savings) will already be covered in your budget. Identify 3 value categories based on your wants. The money spent on the categories would come from your allocated spending amount each month. Ask yourself questions to help identify your 3 value categories:

• What do you value in life? What do you think you couldn’t live without?

• What brings you the most joy? Which spending has the best return on investment in terms of mood and experiences?

Think about your interests, hobbies and lifestyle:

• Are you a homemaker? One of your value categories could be ‘homemaking’ and involve purchasing plants, good quality linens, and cooking appliances.

• As someone who values quality time, spending money to travel and see family and friends may be a priority.

• A travel lover looking to see new places and learn about new cultures could save up to spend a larger amount on a week or two’s travel. It could be a weekend away or a train ticket to a nearby town.  

• Are you a foodie? Eating out may be one of the greatest pleasures for you.

• As a music lover, attending concerts and festivals, and taking lessons may be where the most joy is.

You can make a list with 5 or 10 value categories and then choose 3 of them. Once you have your 3 value categories, most of your spending should be towards these categories.

If eating out is not important to you, but travelling is, eat out as little as possible and save that money for a trip. Say no to that second coffee out and ‘in-fashion’ boots, and say yes to a great coffee machine for your home. Your spending is going to be personal to you.

Value-Based Spending = Questioning Before Buying

You are being intentional with your spending. By asking yourself questions before buying, you can be sure it aligns with your values, and you will be happy with any spending decisions you make.  

If you’re purchasing an item, ask yourself:

• Does this fit into one of your value categories?

  • If not, ultimately, you shouldn’t buy it. But you could also ask if you will be happy with the purchase if it means you won’t be getting a valued item and will have to wait until next month.

  • If yes, will you use it enough to warrant the cost of it?

• When it comes to travelling, ask yourself:

  • Will you enjoy the holiday while on it, or will you be regretting the decision?

  • When was the last time you went away as a family?

  • Is an all-inclusive stay better or easier than a breakfast-only option?

Can you meet your value-based spending without spending more money than you need to?

• When time spent with loved ones is a value category, going for drinks every week can become too much of a financial drain. Think of other ways to spend time with them: walk your dogs together, walk around the park together, each brings their own travel mug of coffee, and you can catch up on a bench in a favourite part of town.

• If travelling is where you want to spend your money, take a bus three stops away and walk around the area and get to know different spaces around you. You may find a few new favourite places. Take a train instead of flying or driving. Sometimes all-inclusive works out cheaper than eating out every day. Choosing to buy food from grocery stores instead of eating at restaurants can reduce costs.

• Driving a top-of-the-range, expensive car is important to some people. This doesn’t mean it has to be important to you. Choosing to buy a comfortable and reliable car with some perks can save you money, which could be spent on a holiday with the family – two benefits for the price of one.

The questions are meant to keep your actions focused on your goals. There should be no shame in spending your money because it is your money. If you want to eat out tonight, but it isn’t one of your value categories, know that it means denying and delaying a value-based spending item or goal. The idea of questioning yourself is to make you aware of your decisions and for you to be okay with them.

“It's not your salary that makes you rich, it's your spending habits.” ~ Charles A. Jaffe

Why Start Value-Based Spending?

Value-based spending is a good way to align your spending with your life goals. You are making conscious spending decisions that bring you joy now while protecting your future financial security. Your value-based categories can change, but they need to change because something else holds more value, and not as an excuse to keep buying things that bring temporary highs instead of lasting value.

Spirited Earthling is more than just a blog – it's a gathering place for kindred spirits drawn by an interest in self-discovery, the appeal of self-care, and a desire for a deeper connection to the world. Written and created for curious minds and spiritual hearts seeking meaning in everyday life, this blog aims to help you curate your wholesome personal growth with free weekly ideas and affordable resources for sale.

As you navigate your personal growth journey using the words and ideas shared here, consider sharing this blog with someone looking for inspiration or motivation on their own journey. We are all spirited earthlings, and can lift each other together with mindful, connected living.

Thank you for being part of this community.

Best wishes, warmest regards

Jordan

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Exercise: (1) Create a budget if you don’t have one. (2) Identify your 3 value categories.

Journal Prompt: My financial goals for this month / year are:

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