Goals

• Get more clarity on your values
• Critically evaluate if the way you spend your money reflects your values
• Define actions to re-align your expenses and your values

Introduction

Last week I asked you to imagine being your own stalker. Which cringy metaphor will I come up with this time around? Well, exactly the same, but with a twist: Imagine being your own stalker with a weirdly specific fetish for your balance sheet and transactions. 50$ spent on hair products? Again? Oh, and a reservation in a wellness spa for 2 grand, impressive. You must be one well-groomed savorer of the nicer things in life. Passion for other cultures and learning about their heritage? Don't think we are talking about the same person here, I don't see any transactions suggesting that.

What you'll need

• A categorized list of your spending in the last month (minimum) or year (ideal)
• List of personal values (see Step 0)
• Pen and paper (or suitable digital alternatives)
• About 30 focused minutes

Guide

Step 0: Preparations

Time for some accounting

This is where having a firm grasp on your personal finances pays of. Well, apart from all the other benefits you get... Anyway, some of you might already have a categorized list of all your expenses during the last month to a year. If not, this example will give you an idea of what you need to prepare.

You need at least a certain level of detail. "Leisure" for instance will be too broad of a category, as it won't allow you to differentiate between paying for the salsa lessons and the tickets for the latest Marvel blockbuster (cinema is slowly becoming a part of our lives again, hooray!). These might end up belonging to totally different values. So make sure the categories are narrow enough to allow for easy value allocation, but if you end up with 1000 categories, most of which contain single transactions, you've gone too far.

Get some clarity on your values

If you followed last week's recipe, you already have a leg up on the rest. Don't panic if you didn't, you can still redeem yourself, but be quick! Here's a link. Use the list of values generated in Step 0, and while you're at it, you might as well do the rest of the steps, it's a neat little exercise, I promise!

Step 1: What did I actually buy?

How much of your money is being spent on things that resonate with your core values? Using both lists from step 0, this is quite easy to figure out:

• First, get rid of any "fake" spending. These are things that seem to serve a purpose on paper but have no measurable impact in real life. Some examples: gym memberships that are not utilized. Subscriptions to magazines you end up throwing away most of the time. Any subscription for that matter, if you don't or barely make use of them. Simply remove them from your list (and think about canceling them), since they would inaccurately inflate the amount of value you derive from your expenses.
• Apart from deliberate spending aimed at bringing value to your life, there will be a substantial amount of "maintenance costs". These include things such as rent, food, household bills, haircuts, etc., so everything you need to survive and function as a normal human being. Mark these as "maintenance". For some of you, it might be smart to reduce them, but this is not our main focus.
• Now go through all of your spendings and assign one or multiple values to them, but only if they serve the respective value to a substantial degree. For instance, your gym membership (provided you end up going there as well) will support your value of "personal growth and improvement" quite effectively. Buying books will help you acquire knowledge, but probably less so than a hands-on course.

Step 2: Money down the drain

Some of your expenses will not have any values assigned to them. This can mean one of two things:

1. While you couldn't find an exact match from your list of core values, they certainly do improve the quality of your life. Or you might have just forgotten about one of your values. This is fine, as long as it's a worthwhile investment.
2. You are actively wasting money on it. For me personally, eating out once in a while might nourish me to a certain degree, but I'd much rather cook something with/for my friends. This simply overlaps a lot more with my values. A subscription to a streaming service you don't enjoy that much or gain anything else from might fit this category as well. Try to eliminate these costs. You'll find inspiration for where to invest the money instead in steps 3 and 4.

Interlude: This isn't about budgeting

I'm not trying to give you any financial advice, and while some changes that I suggest in this article will definitely help you save money (such as cutting some of your unnecessary expenses), this will not teach you how to budget, and it's certainly no replacement for smart budgeting or solid financial know-how in general.

I'm going to assume you know how to handle money, and that you're not going to take any actions that are in opposition to your personal and financial goals. In case you need a refresher or starting point regarding budgeting, I recommend this website: https://www.nerdwallet.com/article/finance/how-to-budget

Step 3: Increase ROI

Throwing thousands of dollars at apple to buy the fanciest new hardware might help you become a better programmer. Spending the same amount on books and online courses is very likely the smarter move. And paying an expert to guide you on your journey to becoming the king - or queen - of code will cost you a lot more, but could be the best investment among all of these options.

Just because your spending and values are aligned, doesn't mean you have no room for further improvement. Take a critical look at all items on your list, and try to come up with better ways to spend your money in pursuit of the same value.

Step 4: Shut up and take my money! Why you're probably not spending enough

"If I can watch an endless stream of content for free, why would I pay someone to teach me how to be a better photoshop artist, farmer, husband, guitarist, barista, or league of legends player? Nowadays, all the knowledge you could ever need is just a google search away. It might take a while to find what I need in some obscure blog post (like this one), but I'll get there! And it won't cost me a penny!"

Well, have you ever heard of the aphorism "time is money"?

Instead of putting money to good use, we prefer to have it sit in our bank accounts, idle. All the while we work hard to improve a skill on our own, use outdated software tools, take risks to pirate a game, and look for coupons and deals that will save us a few pennies. Spend money to make money, and therefore save time - a resource you can never make more of, so why would you ever spend it, if you have the option to spend something else, like money?

This doesn't need to be limited to self-betterment and productivity. Think of the dream vacation you've been putting of for so long, traveling across all of Europe. Couldn't you afford it at this point? And isn't it exactly why you were motivated to do all that overtime recently?

Taking a look at my own "typical month", I'm quite happy to see that about half of my expenses serve a purpose I value, and a large amount of money is not spent because I have to, but because I want to. And as such, it is an investment (some of it literal) into my current and future life satisfaction. However, some areas would benefit from additional funding. Thanks to this overview, I have some ideas of where to spend excess money - in case I ever have some. And without any of the guilt that usually surrounds financial investments, given that it's a deliberate choice, directly supporting what I value most in life.

I hope you came to a similar conclusion. And if you've passively read along till now: stop, and apply it! Remember: it's a recipe, just reading it won't satiate you, only trying it for yourself will.

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