“Open your arms to change but don’t let go of your values.” –Dalai Lama
Budget.
As a financial advisor, I know this: No one word creates a more visceral and emotional response from a client than “budget.”
Creating your budget for a meeting with your advisor is the one activity that clients put off for as long as possible. NO ONE WANTS TO CREATE A BUDGET!
And yet, creating a budget is the most important part of a financial plan. Your advisor needs to have a complete understanding of how you spend your resources. Additionally, your budget allows your advisor to understand what you value and, really, who you are.
If you’re feeling anxious about your budget, consider this: when you live a life around the idea of value-based budgeting, your life suddenly seems to be a whole lot fuller. Isn’t that wild? It seems contradictory -- how can living by a budget actually make you feel like you have MORE?
Many financial gurus focus on the idea that you should spend no more than you need to because you have to, you know, Save! Save! Save! Scrimp! Save! Save! Save! Work hard, work as much as you can, pay off all debt immediately, and save, save, save.
True, saving and investing are integral to wealth building. A well-thought out and strategic financial plan will provide a road map for building an investment portfolio that supports your future and legacy.
However, the question remains: how do we care for ourselves today? If we live with a scrimp and save mentality, we can lose sight of our today. And that is where budgeting and saving with purpose enter the picture.
How you spend your money is clearly aligned with what you value, even if you don’t realize it. What if you purposely thought through your values and included them in your budget? When your values are being supported and developed with financial resources, you’re committing the highest level of self-care that exists. And that -- that attention to your own needs and your appreciation for the things (and people and places and organizations) that you value -- is good not just for you but for your loved ones and community, too.
Here’s a specific example of value-based budgeting: I live in a high-rise in a dense urban area. My environment is incredibly important to me and that’s why I live where I live. I also value not spending my time in a car every day and being able to walk to meet almost all my needs. So, when I create my budget, I make sure to allow for the cost of where I live, and I understand that the amount I spend might not be right for everyone. It might cost a little more than another location...but it’s worth it to me so that I can live the life I want to live.
Plus, I rent! Yes, as an advisor I am not building equity in property; that almost seems antithetical to my profession of equity building! But for me it is about spending my income to support what I value: living in the city, being able to dine out with friends frequently, walking to local grocery stores and cafes, etc. THESE are the experiences I value and THIS lifestyle is what I consider when I’m creating my budget. My lifestyle brings me joy every day and I budget to support it.
When I review my budget and my line items for housing and dining out, I don’t cringe. Instead, I smile. This is the kind of life I want to live and I’ve made it a priority to live this way. And herein lies the foundation for value-based budgeting -- which you might also call “self-care.”
And, you know, how I chose to spend my monthly allotment is just a choice, not a dissertation on my self-worth. Where and how I care for myself, my family, and my community is about my values.
My challenge to us all is to have us think about the choices we make. We might not get to have it all, but when we clearly define what we value most in our lives and actively try to include it in our lives, then it isn't about what is missing but what is present.
When we set ourselves up for joy, we set ourselves up for gratitude and fulfillment. When we are filled up and know what we want in our lives, budgeting just becomes an exercise in support, awareness of what we are doing, and how and where we are living.
The act of understanding your values and consciously making those things part of your life is the ultimate act of self-care and well-being.