Becoming Your Best Financial Ally

Feb 9, 2018

It’s often said that we spend our money on what we value. Early in my quest for financial literacy, I was advised to assess my value system and then align my spending accordingly. Sounds good…

Story Time

Trying to follow the advice of aligning my values with my spending, I sat down and created a list of my values. Then I created a budget which fell in line with those values.

The problem quickly arose that this just flat did not work. Let me make this concrete for you. I’m not a foodie. I don’t really care about food, and it actually often irks me that I have to stop and eat because I just ate like 6 hours ago. Despite this, I eat out a LOT. Not fancy places usually, but still it adds up. I reasoned that since food isn’t really that important to me, I’d cut that budget item way down and beef up groceries. Unfortunately, I actively rebelled against this. I could feel myself hunkering down emotionally and it became ridiculously important to me to go out to get any meal. To the point that I’d eat out for every single one. Definitely not good for the pocket book, and if I kept it down to 7-11 hot dogs then not good for the body.

Month after month, the budget made it plain as day that something was wrong. It also unfortunately made me feel like a failure every time. This disempowered me, disheartened me, and made me want to give up entirely. Clearly I couldn’t do this!

The Point

So why didn’t that work for me? Was that rebellion just me sabotaging myself financially? Or did I just need to be more disciplined? The answer to both those last questions is no. It wasn’t actually self-sabotage, and it wasn’t necessarily a lack of discipline.

What I’ve learned from tracking expenses and using it to evaluate myself is that this original advice is completely backwards. Since I wasn’t a master of internal emotional intelligence, I didn’t really understand exactly what it is that I truly valued. I THOUGHT I knew, but it was this lack of understanding allowed me to set myself up for failure and gave me an excuse to feel badly about myself and my lack of progress. Rather than continue to wallow in this negativity, I decided to switch things around and see if I couldn’t find success that way. With this in mind, assuming that I do indeed spend according to my values, then I’m ALREADY spending according to those values — I’m just not conscious of what they are.

In my example here, I thought I didn’t value food. I sat down and began cataloging all the off-the-cuff statements I’d make about this particular category. What I finally uncovered is that I really, REALLY value my time, aka convenience. By attempting to get rid of the convenient-eating line item and replace it with the time-consuming-requires-cleanup-eating line item, that caused an emotional reaction which could not be ignored or disciplined away. It was my true value system flat saying “Nope, not doing that.”

With every new insight that this sort of examination revealed, I’d have to test it. My ultimate goals were spending less money and eating better. If I value convenience so highly, what can I do which honors this while still meeting my objectives? I came up with a plan and gave it a few months to test. In this case, it WORKED! I had zero emotional qualms about spending less on eating out IF the alternative was just as convenient for me. In cases where it wasn’t convenient and I could feel that emotional response gearing up, I learned to reframe things in a way that aligned with a different value. For example, I’ve eaten dinner at home for 4 nights and the inconvenience of cooking is getting too irritating to ignore. So I reframed the ‘chore’ of cooking into an experiment to see if I can make a dish which combines specific challenging items. In this example, I’m tapping my learn-new-things value, which is more than happy to deal with inconvenience if the learning is entertaining.

Interested in seeing how you can leverage your own value system to help you meet your conscious goals? My process requires having at least some history of tracked expenses plus it requires a willingness to really honestly evaluate yourself through the lens of “what is prompting me to make these specific choices?” Even better, this is a golden opportunity to practice this self-reflection without judgement. Find a single category that you want to change but can’t seem to. In my example, it was eating out. Once you have it identified, you’re going to experiment. Guess what? You’re actually LOOKING FOR the failures. It’s the failed experiments that will give you the most insight. For every time the experiment fails, pay close attention to the words you are telling yourself.

As an example – my experiment was absolutely NO eating out. When I’d swing through a drive-through, I’d made a mental note that I told myself “I don’t have time to eat at home, and I’m not going to go hungry”. Two convenience excuses there. Ok. Failure yields successful insight. WIN!

You can keep track of these as a note in your phone, in a little notebook, or just mentally tabulate them. Whatever works for you, but keep track of them. The more you are paying attention without judging what’s coming through, the more you’ll ultimately have to work with.

As a note of caution: make sure the time-line for any of the experiments is small enough that you don’t put yourself into financial difficulty in the meantime. Another insight I learned: What we spend money on satisfies emotional needs. And yes, this includes paper towels! The real trick is digging past the surface, which often appears very logical, to find the emotional aspect being satisfied. Remember: It’s not logical! It’s emotional. Notice my example seemed logical, but it was actually driven by the emotions beneath the surface. It’ll take practice, but there is gold here if you have the patience to mine it.

My experience is why I have come to believe that money is actually a amazing tool for learning all kinds of things about ourselves: motivations, value system, and personally effective punishments & rewards. This tool of using money to unearth the true core values, if used consciously and with a spirit of curiosity with the goal of making yourself into an ally, is the single best financial decision I’ve ever made and it’s the only one that works long term for me. What does your spending tell you?

TL:DR

Your tracked expenses is a treasure trove of personal insight just waiting to be mined. The process of mining through it can help turn your subconscious self into your strongest financial ally, enabling you to consciously meet your spending and savings goals.

About the Featured Image

One of the doors into Fort William, Shrewsbury, England. Until I was able to get through what appeared to be a heavily fortified castle door into my own subconscious self, I very frequently didn’t understand what drove me to make the decisions I did.