Building a Budget that Matches Your Values

Budgeting is never easy. As you move and grow through life, your budget will evolve and change over time. They can be tough to stick to, and all too often we fall off the budgeting bandwagon not because we’re incapable of sticking to a budget, but because our budget just doesn’t fit our lifestyle anymore.

However, you can fix this budgeting issue by rewriting your budget in a way that aligns with your values. When we spend in a way that lines up with the things that matter most in life, we’re less likely to overspend in other, less important categories of our budget. In other words, when we start using our money as a tool for happiness, fulfilment, and success, we continue to use it in a positive way.

What Do You Value?

To build a values-based budget, you have to start by figuring out what you value! It sounds simple enough, and many people may be able to quickly determine what in their life is a priority. However, taking a values assessment can also be helpful. Examples of some values you might uncover are:

  • Family
  • Friends
  • Faith
  • Education
  • Health
  • Adventure or Travel
  • Experiences
  • Security
  • Home
  • Self-care

You don’t have to have just one value, either! You might find that you consistently prioritize family, faith, and self-care in your life, or maybe you find that above everything else you always return to adventure when you’re building a lifestyle you love. No matter how many values end up coming up on top, you can use them to start creating a budget that works for you.

How Can You Align Your Spending?

When you start to put together a budget, keep this value set in mind. When you’re deciding how you want to spend your money either as a single individual or within your family, you can make an effort to direct your income toward different expenses that reflect your values.

For example, if you and your partner or spouse value family, maybe you look at opening a 529 plan for your children’s college expenses. Or if you value your faith, you can build a tithe into your budget that’s a percentage of your income. As you look ahead, you can also incorporate your values into your long-term financial goals. For example, many people who value their education create a trust or scholarship fund with part of their wealth that’s given to their alma mater as part of their estate plan.

Eliminate What Doesn’t Work

Don’t stop at adding budget line items that match your values! You can eliminate expenses that aren’t in line with your priorities. Tackle budget items big and small that aren’t actively leaving you with a sense of fulfilment. If you have a house that’s too big when you prefer to travel, consider downsizing to save money and put more toward your travel fund. If you consistently overspend on eating out when you prefer quality time with family, consider hosting a monthly family potluck at your house with your kids and grandkids. In short, find ways to create a budget that supports your values instead of working against them.

Are you ready to create your value-based budget? Let’s talk!

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

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