Values-based spending allows you to spend money on things that are aligned with your values. When you spend money on the things you love, you are less likely to experience buyer’s remorse. Whether it is concert tickets, eating out, a trip, or a new outfit. Ain’t nobody got time for buyer’s remorse!
How Much Time Does it Cost?
Have you ever wondered how much of your time something costs when you’re paying for it? Not how much money, how much time.
How many hours do you have to work to be able to afford something?
This is not a “stop spending money and be frugal” post. This is a “spend money on the things you love” post. I believe in spending money on the things that are important to you and bring you joy.
So, what does all of this have to do with time? Time is a non-renewable resource. Once it’s gone, you can’t get it back. We spend way too many hours of our days working, trading time for money, to have that money go to waste on things that we don’t care about. Make your time count by spending your money on things you truly value.
What better way to help determine if you value something than to ask yourself if it is worth your time?
Erica’s Story
Erica wants to find out her take-home hourly pay rate. Her monthly take-home pay is $4,000 and she works 160 hours per month (based on a 40-hour workweek). Erica divided her take-home pay by the number of hours she works and calculated that her take-home hourly pay rate is $25.
Armed with her hourly pay rate, Erica looked at her last three purchases and asked herself:
Was this worth the number of hours I had to work to afford it?
These are her last three purchases and what she realized:
- $200 concert ticket (8 working hours) – She’s going to see her favorite artist, absolutely worth a full day’s worth of working hours!
- $60 outfit (2.4 working hours) – meh… she bought the outfit after someone that she follows on Instagram posted that it was on sale. Now that she has it, she doesn’t like it that much and doesn’t know when she’ll have reason to wear it. Erica determined it was not worth working over 2 hours for this outfit.
- $75 birthday gift for a friend (3 working hours) – Erica wanted to show her friend how much she cared about her by buying her a nice gift. The truth is that it didn’t need to be 3 working hours’ worth of a gift because a less expensive gift wouldn’t mean that she cared about her friend any less. Going forward, she decided that she’ll spend less on gifts and redirect the money towards something else that will help her reach her goals.
My Values-Based Spending Plan
When I implemented a values-based spending plan, I realized that all the time I spent thinking I couldn’t afford a vacation without charging my credit card, I WAS WRONG. I actually could afford it, but I was spending my money on shit I didn’t care about.
I decided to stop spending money on things that were not important to me so that I could start going on debt-free vacations, increase my retirement contributions and invest in my daughter’s college fund.
It’s Your Turn
It is your turn to have your own AHA moment.
- Calculate your take-home hourly pay rate
- Look at 3 of your recent purchases
- For each purchase, ask yourself if it was worth the number of hours you had to work to afford it
- Include a category in your spending plan for the types of purchases that you determined were aligned with your values
- For purchases that were not aligned with your values, ask yourself:
- Were you shopping because you were bored?
- Was it something you saw on a social media post?
- Did you go out with friends/family because you felt bad saying no?
- Is this a recurring pattern?
Remember that the purpose of this exercise is not for you to be hard on yourself. The purpose is to be more intentional with your spending so that you can spend money on the things you actually give a shit about.
Does this mean I can spend all of my money on things that I value?
Hell to the NAW! Values-based spending co-exists with your spending plan. It helps you spend your discretionary income on the things you value. You still have to pay bills, save, and invest. But don’t be surprised if you find yourself reevaluating how much you spend on certain categories after you get clear on what’s most important to you. When you see how many hours you have to work to pay your car loan, you may decide that having an expensive car is not that important to you and consider downsizing to spend more money on that thing that you really want.
What’s Next?
Want to start spending your money on the things that truly matter to you? You’re gonna need a plan.
Get my Free Aligned Spending Plan and start matching your spending with your values.
