“Every budget has a story.” We’ve mentioned that before on this blog, but it bears repeating. Why? Because we could all use the reminder that your budget is unique to your values.
In working with so many couples and families over the past decade or so, one thing I’ve learned is that everyone’s budgets and spending habits look a little bit different. And those differences should be embraced! Your budget doesn’t need to fit a certain mold or look like someone else’s. It’s uniquely yours.
Your budget is unique to you
Say we have two identical families who make the same money, live in the same suburb, and basically have very similar demographics. As many similarities as they share, what we’d find when we look at their budget is different stories. There will be inherent differences in how they spend their money.
Quick story for you: Hannah hosted a workshop a while ago, where she took three different real life budgets and asked a group to tell her what they learned about this family or person from the budget. It was fascinating seeing what stories people came up with.
Once she revealed the person or family’s actual story — age, career, lifestyle, etc. — the puzzle pieces of each budget started to fall into place. A large amount of cash was no longer an investment opportunity, but retirement savings. This monthly expense wasn’t for fun and entertainment, but for child care.
Your budget, your story, reveals a lot about what’s important to you.
Discover your values
Every budget has a story, but do you know what that story is? What are the values that dictate your spending and saving habits, or your future financial goals?
You can dive right into budgeting and only focus on the numbers, but we think that’s starting the financial conversation at the wrong point. Sure, you may figure out where to cut expenses or tweak your savings plan, but you don’t know why you should do that. That’s why you should identify your values first.
Psst…if you haven’t done that yet, grab the free Values Exercise here.
Your values impact your entire life, not just your finances. They influence your choice of career. Where you want to live and in what kind of home. Who you want to spend your life with. The passions and hobbies you want to devote your time to. Discovering your values will not only benefit your budget, but your life direction.
Living in your money values
It may not seem like every line item in your budget reflects your values, but you may be surprised. Say you’re working from home and you’re too busy or tired to cook dinner. Instead, you order a meal from your favorite locally owned restaurant.
How does this reflect your values? Maybe you’re dedicated to supporting small businesses, and that’s why you chose a local place over a chain. Or you prefer high-quality organic food, which is why you bought a healthier meal instead of grabbing fast food. You could even say that convenience was a higher priority than stressing out over cooking for your family.
All of these may be true! And while they may not be core values to who you are as a person, they were still important to you at the time. They still matter.
From Hannah’s experience as a Certified Financial Planner™ professional, people who are living their happiest financial lives are ones who can align their budget with their values. Aligning their budget with their values leads to less second guessing financial decisions, less stress and anxiety about your financial future, and even better communication with your partner over money, as long as you’re talking about money together.
Stick to your story
Knowing the story that your budget is telling will help boost your confidence in your finances. It’ll help you avoid comparing yourself to family, or friends, or other people on social media. It’ll strengthen your commitment to your own story, values, and financial goals.
We hope this blog has helped you reflect on your budget and values, and maybe even pushed you to take action on your finances.