How To Spend Money With Intention: My Exact Formula
One of my favorite things to work with my clients on is value based spending. I truly believe the more we incorporate value-based spending into our lives the happier we will be.
As its core, value-based spending is spending money with intention. I think of this in two pieces:
* Do I want to support this type of company, product, or person with my dollars?
* What kind of value will this add to my life? Or, what is the utility of the purchase?
Recently, there was a discussion in my Facebook group:
How can you use value-based spending to decide what to purchase from your wants list when you have some extra room in your spending plan?
The answer is… different for everyone!
Why?
Because everyone’s values and priorities in life are different. But, because I’m here to give you advice, here are a couple rules of thumb….
1) In general, anything that is going to help alleviate stress or promote a healthy habit should be considered first.
It’s a smart decision to prioritize your health. So if a yoga class, new hiking boots or starting a garden is on your wants list you will automatically get value in it by promoting a healthy lifestyle for yourself.
2) Consider if you can get items from your “wants” list from places you prefer to support with your business
Maybe it’s important to you to shop at the farmers market, or shop local in general. Maybe you buy online but try to focus on ethical companies. Not every purchase can be analyzed from this perspective, but the more you can incorporate it into your life, the more aligned to value-based spending you become.
3) When you are prioritizing strictly “fun” purchases, consider the utility of the purchase.
The utility of a purchase is how much use you get from a purchase once you bring it home.
For example, my sister and I were shopping in a casual boutique last weekend. The store fits my style to a tee and I would be happy buying all my clothes there till the end of time.
I had my eyes on this poofy, flowing skirt. Completely adorable. But although it was the item I wanted the most, it was the item I needed the least.
I knew after I got that skirt home it would just hang in my closet because I lead a casual lifestyle. That purchase would have very low utility for me. The grey tunic I ended up with instead, high utility, but not quite as flashy and fun.
If value-based spending is a new concept to you please understand that it is a practice, not a once and done solution. It’s something to start small with and let it grow within your life. The first step is to define what is important to you.
Whatever it is, start to do it more, and cut out more of what doesn’t align. When you can combine that with high utility purchases you can begin to feel really good about the money you put back into the world and your relationship with money will only improve.
You can have an impact and use your voice with your dollars, however big or small. As value-based spending grows in your life it becomes really fun… promise! I encourage you to start this practice in your own life today.