Spending & Values

Spending & Values

                   Spending reports are reports of one’s personal values because spending reports reflect decisions. Decisions to exchange money for other things are a result of desires or perceptions one has regarding what one needs. We make exchanges because we have needs. We need what other people have to offer. Typically, people value what they want and what they understand that they need. Collecting your receipts or reviewing your spending in some other way then, is an excellent way to track your decision-making and therefore, values, perceived needs, real needs, and wants.

                   What leads to the decisions reflected on your receipts? Did you not have something at a certain time that you ended up needing? Food, for example, especially lunch for our nation’s typical work schedule, is a need we can easily foresee and provide for more inexpensively earlier in the day by packing lunch from the groceries we have already paid for. Are there minor changes to your daily routine/lifestyle that you could begin to make in order to manage/limit having to make costly decisions that are a result of failing to plan, or of putting off a decision at an earlier time? What expenses do you have that are a result of decisions produced by values you want to change, modify, or erase? Trace, in a backward fashion, the mental process you went through that led to a particular purchasing decision.

     It is important to note that not only does each spending decision reflect a value, but a group of spending decisions considered together reflect other values, as well as a sort of financial story, you have that are not as directly and clearly identifiable by looking at one item purchased on a receipt. What kind of story about you does your expense report tell? If you are not honest, you won’t get anywhere. It is not necessarily wise to spend loads and loads of money on gifts for your family just because ‘family’ is one of your top values. It would not be wise to purchase items simply because they, in some way, connect to a value you have. Rather, each spending decision should be considered not only in isolation but also in the context of something larger, like a plan. Initially, this plan should probably be a budget.

     A budget is a plan and it should, over time, begin to reflect an even larger context into which you can place all of your spending decisions and financial activity in general, like a goal or even a world-view. This is how one begins to control expenses and only spend when spending is needed. Expenses must be put in their places. Money must be put in its place, if we’re to have control over it. This requires a plan, outlook, or world-view and it requires sticking to it. If you plan to have enough money and income to retire at a certain age, and you are a long way off, then a long vacation to the Bahamas paid for on credit is probably not a part of a good plan to get there. But essential expenses like groceries and rent still are. You still have to have food and shelter while you’re building assets for generating retirement income. Plans can control expenses and they also reflect the values we seek which, as mentioned above, are not always easily discovered from looking at one item on a receipt. These values may include efficiency, frugality, resourcefulness (or avoiding wasting time and money), saving, generosity, etc.