Part of finding a balance in our spending habits means spending more money on things that enrich our lives and spending less money on things that don’t matter so much.
When I work with people as a financial coach, I often get them to do a values exercise. This happens after they’ve already tracked their spending for a month. Now that they know where there money is going, they need to decide if it’s going where they want it to go.
Part of this exercise involves filling in as many of these phrases as you can. Try to fill in five to ten at minimum but the more you can fill in, the better it will work. If you are married or in a serious relationship fill these out separately and then share them afterwards.
I don’t mind spending money on ______________ because ______________.
I don’t like spending money on ______________ because ______________.
There are no right or wrong answers. Writing them down can help you identify what is important to you and where you don’t mind spending money. It can also help you identify areas where you could really cut back to free up funds to spend in areas that align with your values.
I will share some of mine with you here.
I don’t mind spending money on:
I hate spending money on:
Recreation because I like to keep fit and spend time doing things as a family is important to me.
Extended warranties because I think companies should guarantee their products without me having to buy extra insurance.
Painters, repair people or someone to shovel my extraordinarily long sidewalk because it frees me up to spend more time doing what I enjoy.
System access fees and activation fees because if you want my business, you’ll be clear about the actual charge and you won’t charge me extra to be a new customer.
Ethnic food in restaurants because I have no hope of making something as good at home.
Drinks in restaurants because I get the exact same thing at home for a fraction of the cost.
A cell phone because knowing I can call someone in an emergency or the school can reach me if the kids get sick gives me significant peace of mind.
Fundraising products if I can get it for significantly less elsewhere because I’d rather get a good deal on the product and write the school or team a cheque.
Charitable giving because it helps people in need.
Dry-cleaning because I can buy the shirt on sale for less than I could get it dry cleaned.
Healthy food because my health is important to me and I like feed my family nutritious food.
Regular food in restaurants because if I want a hamburger or chicken caesar, I can make a better one at home for less
Eyeglasses for family members because glasses become a part of their appearance and they way they view the world. I’d rather they had the best quality we can get.
Membership fees to shop because I don’t want to pay money to shop in a store.
Keep in mind that these are my values. It doesn’t mean they are values that anyone else should have. Each person will have their own set of values. I knew a family that lived extremely frugally and spent very little on decorating their house or on groceries. Yet every summer they’d travel to Europe to visit extended family. This was a family who recognized that it was more important to them to travel than it was to live in a well decorated house or eat expensive food.
This will also help you identify areas where you can budget to spend a little more freely. Knowing you’ll have enough money left in your budget for the things that matter to you makes saving on the things that don’t matter even easier.
The is the time of year when many make New Year’s resolutions. We’ve considered financial resolutions in the post on 8 Financial Resolutions, but when you think about some of your other resolutions, make sure you allow room in your budget to reach your goals. It’s ok to spend money. When you spend it in ways that are important to you and save money on things that aren’t as important, you can increase your personal standard of living without a huge hit to the budget. The trick is figuring out what those values are.
What are some things you don’t mind spending money on?
Kathryn works in public relations and training for a non profit. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Her passions include personal finance and adult education. Kathryn, along with her husband and two children live in Ontario.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).