There are so many things you can do with your money and everything is marketed so well and well, of course, you just have to have it for reasons x, y, and z! How do you decide? Do you decide? Eh, just throw it all on a credit card, you’ll pay it off eventually right? And besides, that’s what everyone else does. You know… everyone else like those 53% of Americans who have less than $10,000 saved for retirement. That’s definitely not enough. Unless you can survive on less than $400 a year. (1/3 of Americans have absolutely no retirement savings at all. Maybe they bought a new Tesla instead. Throw it on the credit card!)*
So what do you do?
Put your money where your mouth is.
Wow, yes, great, thanks for that platitude, you might be thinking. To which I say: you’re welcome! Because it works! And it’s really that easy (more on that later).
Others have called this “values-based spending” which is nice, catchy, and professional sounding. I’m stubborn so I’m going to continue to just tell people to put their money where their priorities are. Where you spend your money says a lot about you whether you want it to or not. People can tell what you prioritize when they see your budget – or your home, car, clothing, Instagram photos, etc.
I’m still in the process of figuring out my personal priorities but I’ve got a pretty good idea. I value:
- Travel. What can I say, I’ve got the bug, the itch to move and see and do as much as I can in however much time I have left on this funky little planet. I’ve felt like this for as long as I can remember and I do my best to scratch that itch whenever and however I can.
- My relationship(s) by which I mean both my SO and my family. I generally don’t pour a whole lot of money into my relationships because there are so many cheap or free things to do together that I don’t have to. The most important thing is spending the time to build those relationships. However, as I am currently in a long distance relationship, my money will be going towards visits!
- The Great Outdoors. Hiking isn’t terribly expensive, except for the gas it takes to get out of the city and beyond the suburbs. I make the time for it, and it’s the main reason I’m willing to drive that long (other than to go skiing!).
- Time and (financial) stability. This is the big one. This is the reason I save as much as I do – saving my money and investing it shuttles me along to my ultimate goal: Financial Independence, which, in turn, will give me time to focus on what’s important to me and the stability to make changes in my life without worrying about the standard bills.
And that’s where my money goes, though the majority of my savings get funneled to travel and savings/investments they are the most expensive priorities.
Even if you don’t think about or know where your money goes, the way you spend it still tells others your priorities. Your fancy car, your 5-bedroom house for one person, your designer label clothing tell people that you value status. You want to look good to other people; you want to look wealthy and successful. You’ve bought into the marketing that bombards us constantly, that tells us that you can’t be a successful businessman unless you have an exotic car that can accelerate past the speed limit in a few seconds.
I had an ex who claimed to value time. He told me that he bought fast food to save time now**, so he didn’t have to cook and could spend more time with me, playing games, doing something else. He was in it for the instant gratification. He wanted to save time now as opposed to later. If he hadn’t spent $600 per month of fast food, if he’d even cut that down to $200 a month, he would have had sizable savings to invest and to use to have more time later – in retirement. Alas, foresight was not his strong suit.
But I can’t because….
Wah wah wah it’s sooooo hard to align my actions to my beliefs. I say it’s important to be nice to others and then I pick on people with disabilities. I say I value stability over status and then I got a brand new car…. loan!
The first step is to realize that your actions aren’t matching your values. It’s easy to say one thing and do another, especially when you’re not thinking about it. The next step is to remind yourself constantly.
Would I rather “save time” and eat take out now or put that $10 into my retirement account? Does that even make a difference? Well how often do I go out to eat? Twice a week? So 8 times a month, which is $80 a month at least, which is $960 a year, which is a good chunk of my maximum deposit into my IRA.
Do I value having a car? Does it have to be new or just reliable? Do I value a new car over taking a trip to Rome?
Is it worth it? What am I paying for, really?
This is called intentional spending. For all the arguably judge-y language in this post, I’m not against spending on things that make you happy. I just want you to be intentional about it and consider whether it really makes you happy.
A Quick Aside:
There’s one more important thing about putting your money where your mouth is: how and where you shop. I don’t want to get too political so I won’t get into specifics but I have a variety of companies that I refuse to support with my money including Walmart, McDonald’s, and Urban Outfitters. I find that says a lot about me – people either get it, or they have questions, but either way it tells them something about what I believe and what I support or don’t.
What are your priorities? Does your spending match that?
*Fair point, readers. That was awfully judge-y. Maybe they had urgent medical expenses that drained their accounts.
**Um. It didn’t. Especially since he didn’t have a car and therefore had to walk or bike to go get his food. At least he got exercise?