Most of us, by necessity, live day to day. Our main goal when we get up in the morning is to somehow make it to the next day without major incident. The world keeps us so busy and distracted that it’s difficult to give much thought to the future or to the big questions of life. That’s why so many of us never get around to making a will or health directives, or planning for retirement. We don’t ask what will happen when we die, or what we want from our later years. Now is all-consuming. We don’t have the bandwidth to consider the distant future. (Although we really, really should.)
However, there is one big life question that you really should consider right now. It can make a big difference in your spending today, as well as in the future. That question is, “What do you value?”
Why is this question so important? As I noted above, most of us are just blindly flailing through each day, trying to survive until tomorrow or next week. We spend without thinking, and without considering how today’s purchases fit into an overarching plan or theme for our lives. This leads to waste and regret. But when we ask ourselves, “What do I value most in life?” and tune our spending to those values, things become, if not easier, at least more sensical.
It becomes easier to identify waste and areas for improvement. As far as savings, you can better learn where you can cut without sacrifice and which cuts are a bridge too far. You can compare your spending against your values and determine which changes would best benefit you, instead of shooting blindly in the dark. And if your values change later in life, refining your answer to the question can keep your spending on track.
It also becomes easier to understand exactly which tradeoffs you’re making. Most of us sort of know that if we’re spending a lot on one thing that it leaves less for other things. The details get fuzzy, though. However, when you examine your spending through the lens of your values, you can better see that spending on travel is great, but that it might leave you less for your old age. If you’re fine with that choice because travel is something you value above all else, then great. But if you also value your retirement, then perhaps you’d better rebalance your priorities.
Here’s an example: Let’s say I define my values in life as wanting financial security, good health, and extensive travel. Of course there are other things that are important to me, but these are the big three. This would instruct me to save more because financial security comes via savings. Also, if I value health, then my spending should include good food. Fast food would be a waste of money, as would cigarettes and booze. A top of the line bike might be worthwhile, whereas a gaming PC that encourages me to sit all day might not be. Valuing travel would lead me to save for those trips and to spend on them rather than buying fancy new cars or unneeded items in other categories. However, I also know that since these are my big three values, there are other things that are receiving less priority. If I’m okay with having a smaller home or less money for my old age, then the tradeoff is a good one. If I want those other things, though, I need to revisit my values.
In other words, if I go to a store and feel an urge to buy something, I should match it against my value list. Is this item contributing to my security or health? Is it getting me to Europe or Australia? If the answers are no and the item isn’t a need, then I shouldn’t buy it. (This isn’t to say that every single purchase must be in accordance with your values. Sometimes you just need to go off script for whatever reason. But you should strive to keep most of your purchases, especially the big ones, in line with your values.)
Most of us don’t have unlimited money. Our PowerBall tickets didn’t come up winners. We don’t have money to fling at every little thing that seems important at the time. If we do that we’ll end up broke at worst, or nowhere near any of our major goals in life at best. As such, we have to make choices in life. Understanding what we value most is a good way to narrow those choices down and start spending accordingly.
One more note: If you fail to define your values, others will try to define them for you. You will fall prey to family or society telling you what you “should” be spending on. Your friends will talk you into expensive outings, or your mother will talk you into the expensive wedding you didn’t want. Advertisers will talk you into their products, or your social circle will talk you into that bigger house or extra kid. But if you know what you value most, you can resist much of this pressure. Or, if you do give into it, you do so knowing exactly why you’re making the sacrifice. (You want to keep the peace with your mother, for example, and the wedding isn’t a hill worth dying on.)
I’ll leave you with a brief list of possibilities. Your values are personal and your list won’t contain all (or any) of these, but consider this a “Values Starter Kit.”
Travel/Experiences
Health
Charity/Legacy
Career/Education
Safety/Security
Financial Freedom/Retirement
Hobbies/Interests
Relationships/Family
Home
Read More:
Put Your Money Where Your Values Are: 5 Tips To Become An Ethical Shopper
Marry Right – Find A Life Partner That Has Shared Values, Habits And Beliefs
Swim Upstream for a Healthier and Wealthier Life
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