Oh, budgeting. It’s so important to financial stability, but so many people avoid it. And why wouldn’t you? We’ve been taught that budgeting is all about restricting spending, saving every penny, and avoiding “unnecessary” fun. But today, I’m inviting you to forget everything you think you know and try this freeing, empowering approach: values-based budgeting.
In this episode, I’m teaching you how to get started with values-based budgeting, a system for determining what you value in life and managing your money accordingly. I’m sharing why this approach is so much more effective than traditional budgeting, and I’m guiding you through the steps for getting started.
In this episode, you’ll learn…
- Why so many people struggle with budgeting that feels restrictive [0:55]
- How to define what’s most important to you and start values-based budgeting [2:32]
- How to start funding the things you value with the money you already have [6:04]
- How to adjust your current spending habits to more align with your goals [8:26]
- Why you should focus on what you can do with your money, not what you can’t do [10:01]
- Why you might be making unaligned money decisions and how to adjust your mindset [12:05]
If you’re ready to get started with values-based budgeting, tune in for this week’s episode.
Tune in to this episode to learn how to budget in a way that feels freeing and empowering, not restrictive.
In the episode…
When most of us think of “budgeting,” we think of those finance gurus who preach making coffee at home, skipping nights out with your friends, and saving every spare penny. We think about all of the things we’re going to lose. And because of this version of budgeting, many people avoid it.
Budgeting doesn’t have to feel like this. In fact, it doesn’t have to feel restrictive at all. With a simple mindset shift and an intentional spending plan, you can actually learn to enjoy budgeting and use it to fund the life you’ve been dreaming of.
With values-based budgeting, you get to decide what matters most to you, not what the finance gurus say you should spend your money on. Once you define those values, you can allocate your money accordingly, spend in a way that feels aligned with your desires, pay down debt while saving, and clearly prioritize your financial goals.
Ready to give budgeting another try? Here’s how to get started:
Step 1: Determine what you value most.
Imagine I came to you with one million dollars. How would you use it? You might pay off debt, save for a vacation, or put money aside for your family. Your actions speak to your values, the categories that matter most to you and deserve your financial attention. There may also be smaller things you value in your day-to-day life, like a monthly manicure or daily Starbucks run. If they enrich your life, add them to your budget.
Step 2: Align your budget with your values.
In order to start funding your dream life, you need to turn it into actual line items in your budget. If you value travel, create a savings fund for your next trip. If you value eating fresh produce and home-cooked meals, increase your grocery budget to reflect that. If you value physical wellness, set aside a bit each month for a gym membership or massage. It’s easier to spend in alignment with your wants and needs when you have a clear picture of how much you need to set aside for them.
Step 3: Practice alignment while spending and saving.
Now that you’ve created a budget that aligns with your values, you need to stick to it. Whenever you’re tempted to make an impulse purchase, ask yourself, “Is this in alignment with my values?” If not, choose to lean into your priorities! Unlike traditional budgeting, values-based budgeting helps you make decisions with confidence and a clear end goal in mind.
So here are the takeaways I want you to remember from this episode…
- Budgeting doesn’t have to feel restrictive. It’s about funding the life you want, not cutting out fun entirely.
- You don’t need a lot of money to practice values-based budgeting. Start today with what you already have.
- Your spending and saving habits should be determined by what you value most, not what anyone else says you should be spending your money on.
So forget what you think you know about budgeting and give this values-based approach a try. Trust me, it’ll make all the difference in your financial confidence and clarity.
If you’re ready to improve your relationship with money and start making moves towards your financial goals, apply to work with me so we can create a plan to get you there.
The Transcript
Hi and welcome to Money Files, I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Hello, and welcome back to another episode of Money Files. I’m excited to chat with you guys today. I want to dive into the fact that I know you think if you start budgeting, that means you have to restrict everything that I’m going to ask you to think about all the things you can give up and how you need to stay inside and not have any fun. But that is not how I want you to think about budgeting, because that’s not what it is. I want you to see budgeting as a tool that allows you to do more with what you have, and it allows you to have a life that’s free of financial anxiety. I don’t want you at home. Being stressed about my paycheck isn’t coming. I don’t have any money up late at night, three four in the morning because you don’t know what’s happening with your finances. So if you think about budgeting being restrictive and that’s the thought that you walk around with, of course it’s going to feel restrictive.
But today I want you to think about all the things you can be doing with your finances because I want to talk to you about values-based budgeting. As a coach, I never told my clients like, you can do this or can’t do this with your money. I always bring it back to what you say that you valued? What did you say your goals were? Because I always want to connect your spending back to these points because it allows you to be intentional. It allows you to shift your money mindset. It allows you to think about money outside of your paycheck on the 15th and the 30th, or thinking about what you can do with the money that’s in your bank account beyond the next 15 days or the next 30 days when you get paid again. I want you to expand your capacity to have, and I want you ultimately to feel great about how you’re spending your money, whether you’re spending your money to get a massage or you’re spending your money to travel or you are setting aside money for the house that you want to buy. Like, I want you to feel good about the decisions that you’re making because of the fact that you are someone who’s intentional with how you manage your finances.
So let’s talk about values-based budgeting today. Values-based budgeting is exactly what it sounds like. It’s budgeting based on the things that you value. You’re not going to budget based on the things that I value or based on the things that your grandmother values or your grandfather values. Your budgeting is based on the things that are valued to you, like you are a unique individual, and it should reflect the things that are unique to you, the things that you enjoy so that you ultimately find joy in budgeting.
So as always, I’m going to ask you if you are in your house listening to me right now. Definitely take out a piece of paper. Do this work with me because you may discover that you’re already spending your money in a way that’s reflected in the things that you value. Or maybe you find out like, Oh, there are some things over here that I want to tweak. And so let me actually do the work to tweak my spending so that it’s more in alignment with the things that I value. So simply put, the first thing I want you to do is just think about, like, what do I value? Maybe you haven’t asked yourself that question before. Like, What do I value financially? What do I value personally?
A good question to ask yourself if you’re stuck and you’re not sure what you value, you’re like. That’s a really hard question I haven’t thought about. That is if you had a million dollars, how would you spend it? Don’t worry about the fact that you don’t have to pay taxes. We cleared that for you already. But if you had a million dollars, how would you spend that money? A lot of the times when I’m working with clients, what comes out of this exercise is they start talking to me about what I would call financial freedom, financial security. They start talking about paying off debt. They start talking about saving. They start talking about investing. They start talking about even spending money on travel. A lot of people talk about setting aside money for their family or helping someone pay off bills, whatever that looks like. So we really start from that point and I start to ask them like, OK, well, what does this mean in terms of what you value financially? It sounds like you value some type of financial security, and you talked about giving money to an organization. It sounds like you value community. You talked about setting aside some money for travel. So you like travel, you like experience. So we really start to think about what they would spend money on. I’ve also been told that a million dollars is not a lot of money, which it really is. If you think about what you can and cannot do with a million, it’s one hundred thousand dollars split up 10 times, which if you think about student loans, all these things that add up, all of a sudden the million dollars is gone. But that’s not what we’re talking about today. When you think about having a million dollars because typically speaking, we think about that as a lot of money. We’re not caught up in, OK, well, but I don’t have that much. I can’t do this. It allows our brain to think in this expansive way. So when we’re thinking in that expansive container, we can easily identify what we would want to be spending money on. So what I want you to do now is think, OK, that’s what I would do with a million dollars. Well, I don’t have a million dollars to give you, but you do have the paycheck that you make every two weeks, every month, whatever that looks like for you.
And now I want to ask you, OK, well, how are you actually using your paycheck to fund a life that is in alignment with the things that you value? Just because you don’t make a million dollars and you don’t have a million dollars every single month, does it mean that you can’t be leaning into those things that you would do with a million dollars if you value financial freedom? And that looks like paying off your debt? Well, we could be really intentional with creating a debt payoff plan. If it looks like you are able to save money because you want to be investing well, there’s some intentional things we can do there to make sure we’re making saving a priority that changes over time as you make more money. But it’s about being intentional about the fact that you want to save. If you said you like travel, we can be really intentional with how you’re setting aside money for travel. So sit with that and really think about what those things are? What are they like even in the top three? I would say things that you want to say you value financially right now. It doesn’t mean that those things can’t change over time, but just narrow it down to three things that you value financially. If you come up with 10 things that look like maybe put the other seven just on the back burner right now and just think about this moment, what are those things that you value financially in this season? Because we’re all starting at different places.
So when you think about what you value. Maybe I generally throw out the financial freedom and security and look like paying off debt and saving because a lot of the people that I work with, those are the things that we’re working on is like saving more money. We’re working on paying down debt. And so if we know that we have a plan for those currently with how you’re spending your money, it makes the rest of life easier. Even if it doesn’t mean that the debt in this savings automatically you’re saving is really high and your debt decreases and it’s zero. But if we have a plan, it means that we are going to be working towards your emergency fund, increasing to the amount that you desire or your debt going all the way to zero. It’s all about having a plan. Maybe you said you enjoy experiences, but then we can talk about how we can use your money to actually plan for experiences.
So if you are looking at the things that you value, what I want to think about here and I don’t want you to do anything technical with numbers, but if you were thinking about your budget, don’t tell me I don’t have a budget. We’re just going to have a budget. But if you were thinking about a budget, like what would be the line items in your budget if they were in alignment with the things that you value? So I’ll give you an example. If you said that you value travel, maybe one of the line items in your budget would be a travel fund. If you said you valued your financial security and you wanted to pay down debt, then maybe one of the things in your line item in your budget would be extra debt payoff. If you said you valued community, maybe within your budget is something called giving to others. That’s something that I have in my budget because one of the things I value is community. I want to be able to give to others. And so that’s what that looks like in my budget. If you said you valued health, like what does that look like in your budget? Maybe it means that your grocery budget is a little bit higher because you want to be able to get more fresh fruits and vegetables. Or maybe it means you have a subscription to the gym, but really think about what line items are going to be in your budget that reflect the things that you value.
Because when we actually talk about creating a budget, I always want to come back to what is it that you value and how are you spending your money towards those things? Notice I’m not talking about what you can’t do. What you can do if you get a latte is make you poor. Like, that’s not the goal of values-based budgeting. We’re talking about it from an assets based approach and thinking about all the things that we desire to do with our money. The true goal in this episode is to help you take a step back to think about how you want to be intentional with your spending to think about what brings you joy. So think about why I spend money the way that I do so that you can decide what you desire to shift.
So now that you’ve thought about the line items that would be in your budget, you have your top three values. I want you to take some time and look at how to actually open up your bank account and I want you to look at how I am currently already in alignment with how I spend my money? So if you looked at the past week to two weeks month, like how am I spending money right now that’s in alignment with the things that I value? And then I want you to ask yourself, like, where is there misalignment in my budget? So notice I’m asking you to look for what’s already working. How am I spending money on the things that I said are things that I value? And so maybe you already are setting aside money to save for travel? Maybe you are highlighting the fact that you set aside money for auto maintenance, and that’s really you can see that being aligned with financial security because you’re not going to have to put money on a credit card because you already set aside money for that. Maybe you’re proud of yourself for setting aside money for Christmas, because that also is in alignment with your financial security goal. Just really thinking about how you’re saving for things that are both short term and long term goals. So maybe that’s why you’re excited about being in alignment and then maybe when you look at when you ask yourself the question of, Where am I misaligned? You can look at some things when you actually look at your spending, maybe you notice that you’ve had like Amazon purchases that you can’t quite pinpoint what they’re for. And so there might be you’re questioning right now, like, is there some misalignment there? Or maybe there’s misalignment with the fact that when you look at how many DoorDash deliveries you’ve had or UberEats deliveries, it’s not that it’s bad, but there’s just misalignment in the fact that you said health was something that you valued. But when you kind of look at your eating patterns, you know that you’ve bought a lot of food out that hasn’t been in alignment with your health goals. But because that money is spent, it’s not in alignment with your health goals. It’s also affecting your financial goals as well. You start to dig a little bit deeper. You also notice like, Dang, I got a lot of subscriptions, but I’m not even sure I use all of these subscriptions, nor are they in alignment like I would rather spend that money somewhere else.
So I just want you to be curious as I said, how are you already in alignment with the fact that you want to spend your money intentionally and you want to be putting your money towards the things that you value financially? And where are you maybe misaligned? So out of that, I want you to think about what you’re proud of when you’re thinking about your spending. What are some areas that you want to revisit? So that might be like I gave you those examples of eating out. I know I’m guilty of like, what are those Amazon purchases for, girl? I don’t even know. But like, you know, it’s a place for me to check in and to see, are those purchases in alignment? Maybe it’s subscriptions where you’ve signed up for something that you’re not actually using. Maybe you have Hulu, Netflix, Disney Plus and all of any form of television that is available to you, but you’re not actually using it. So it’s just not in alignment with where you desire to be in this season. So just think about areas that you want to revisit.
And then I also want you to think about when you thought about your values, maybe what’s not included right now in how you spend your money or in your budget? And so what areas do you want to start thinking about including? And I know I’m guilty. I’m not asking you to put numbers to this right now, but I just really want you to do the thinking behind this because we can always shift the numbers later. So maybe when you’re thinking about the things that you valued and some things that you want to include, like maybe you want to be more intentional about having a manicure and a pedicure fund in your budget, maybe you want to be intentional like you. You’re like, Oh, I do like to give to others. It’s not all the time, but I actually do like to give to others. That’s something that I value. And so you’re going to start putting that into your budget. Maybe health is something that you haven’t been as intentional with, and so you want to think about how to include these things in your budget. So the goal of today’s episode, once again, is to get you to take a step back and to think about how you desire to spend your money in a way that’s aligned to what you value financially, what you value personally. Say this episode because I will also come back and I will dove in a little bit more with thinking about, OK, now that you have your values, how do I actually create a zero based budget and kina? Yeah, I have the things that I value, but I still want to make sure I’m not overspending, et cetera. But first, before we get to that, I told you that I really want you guys to do the money mindset work, really setting up intentions so that you can shift how you desire to spend your money.
Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.WealthOverNow.com/Appointment and let’s get started.
