Your Life

Knowing your values can help you manage your money

- September 29, 2021 4 MIN READ
Knowing your true values can help you manage your money

Getting in touch with what matters most to you can flip how you view your finances. In fact, knowing your key values can help you manage your money far more effectively.

When we think about our finances, we tend to think about budgets, investing, spending and saving. In essence, we’re thinking about money.

And why wouldn’t we be? Ultimately, that’s what we’re working towards – increasing our savings and wealth, and often decreasing our spending (or at least not increasing it!).

But what if we could look elsewhere to improve our financial position? Not just at our bank balance, but at something much bigger than that: our lives as a whole, and our appreciation for exactly what we do have.

The grateful approach

When we look at what we spend money on, it’s essentially things we want and things we need. Often, even the things we think we need are simply wants in disguise – we don’t need ten pairs of shoes, we don’t need the latest phone model, we don’t need to dine out regularly.

By shifting your point of view to examine your needs and wants, and taking an approach of gratitude, you can significantly change what you value. And focusing on your values can help you manage your money better.

A short exercise to get you started

Take thirty seconds to think about the happiest memories you have – the ones that fill you with joy and satisfaction. Sink yourself into what you felt and saw and enjoyed. Now ask yourself:

  • Was it buying a new pair of brand name runners really important? Or was it going for a walk with your partner or kids in a pair of shoes you didn’t even think about?
  • Can you recall the amount of money you spend on food when you last went to dinner with your best friends? Or are you remembering how great it was to hang out with them, no matter what (or where) you were eating?
  • In these memories, can you remember what clothes you wore? What other people wore? Did you notice what phone they used?
  • When you last upgraded your phone, was it significantly better? Did it revolutionise your life, connect you with more people, or make you smile more?
  • When you look back at those memories, were they ones with family and friends – people who were special to you? And if they were, how much of your happiness revolved around anything that you can buy versus simply what you were doing?

How values can help you manage your money

You can see how tapping into your values can help you manage your money more effectively.

If your memories were about connection, then start to consider how catching up with people isn’t about how “good” you (or they) look. Nor is it about the brands you’re wearing, or how nice your hair or nails or beard look. It’s about how you make each other laugh, how you understand each other, how you connect.

If your memories were about experiences – travel, hobbies, new things – then ask yourself how much of that relied on “stuff” and spending money. Instead, how much of that was about what you did?

Travelling (pre- and hopefully post-COVID) can be amazing, but it often doesn’t matter so much where you rest your head (as long as you’re safe). Rather, it’s about the side stories, the funny incidents, the time you lost your passport three days before returning home and paying a few hundred dollars to get it replaced (not at all thinking of a personal incident!).

The joy ROI

Hobbies can require expensive equipment, depending on what you choose, but almost anything can be bought second-hand and in good condition to enjoy the experience just as much. Whether that be surfing, bee-keeping, gardening, football, or fishing. Sure, there are always ways to spend more, but they rarely provide a significant increase in your enjoyment.  Focus on what it is about an experience that really brings you joy, and what just feels good momentarily, only to be forgotten.

Think of it as the joy return on your investment.

The more you can understand the core elements of what you enjoy, the more you can appreciate and be grateful for what you have in the moment. Rather than always wanting just one more piece of equipment, one more item of clothing, just a quick “refresh” of your look.

You’ll soon realise how much joy you get from what you already have. When you’re able to be happy with what you already have, you don’t feel the need to keep spending all the time.

The finer things in life

But what about if you’re an absolute foodie, and you love the finer things in life? Or you’re a sartorialist who lives and breathes fashion? What if your passion is collecting garden gnomes from around the world and restoring them to glory? What matters to you will be as unique as you are, and knowing your individual values can help you manage your money.

If anything, you’re in a better position than many people, because you know what you love. This means that rather than trying to dine at exquisite restaurants and dress in the latest trends and collect all those gnomes, you can focus on what matters most.

If you love food, you might prioritise those restaurants, as well as trying to start creating amazing dishes at home to share with friends. Spend more on that, but spend less on things that don’t  matter as much.

If you love clothing, you might decide to spend a certain amount each month on new clothes. But you’ll also learn to sew and alter things to extend your budget – and spend less elsewhere.

For international garden gnome shopping, unfortunately you probably can’t leave the country any time soon – so you’ll be saving plenty.

Value what matters most to you

When you know what matters, you can both value and appreciate what you have right now. You don’t need to spend a cent.

When you do spend money, you spend it on the things you love in life, not what everyone else is doing according to your favourite social media platform.

None of this involves writing a particular budget, it just involves focusing on the moments that matter in life, and trying to create more of them. Because, really, what else would you ever want to spend your money on?