The Blind Spot in Values-Based Spending
Everyone has those things they’re willing to spend money. For some people it’s clothing, for others it’s restaurants or concerts or “toys.” We’ve always recognized that for us it’s travel.
Some people call this “values-based spending” and or “intentional budgeting.” Others refer to such spending as “budget failure justification.” I believe values-based spending is a great idea, though I doubt we’ve all thought through our values as much as we might give ourselves credit for. There’s also a common pitfall of saying you value just about everything, as a way to rationalize spending.
That said, it’s 100% legitimate to choose areas of non-essential spending and decide, “I value my health, so I’m going to buy healthy food, even if it costs more.” Or “I value learning so I’m willing to spend on books, or private school.” Whatever your areas are, that’s up to you. I wouldn’t recommend going into debt for most areas, but beyond that it really is a matter of personal preference.
At the same time, values-based spending has a dangerous blind spot: your values.
The Slippery Slope From Values to Invaluable
Once we pick a category and say, “this is valuable to me,” it’s a slippery slope to viewing that thing as invaluable. Meaning you’d spend (just about) any amount on that area that is so important to you.
The danger isn’t that you value a category, it’s that you have a blind spot toward your spending in that area. Let me give you an example from my life: dating my husband. This is non-negotiable to us. We make do with evenings at home together (that’s not most nights for us), but with two little ones and busy schedules, sometimes we just need to get out and have fun together before 9 pm.
So after our second child was old enough to leave with a babysitter, we went out about once a month and spent at least $50 every time. We’d budgeted $50 since we cherished that time together and wanted to have a meal and maybe do something afterwards. When Neil suggested we didn’t have to spend that much every time, I got defensive, made fun of our pre-parenthood Taco Bell or home dates, and basically shut down that suggestion real quick.
Then I realized I had a blind spot. We could choose to spend $50, and that was fine. Nothing wrong with it. We still do sometimes. But we could also enjoy ourselves just as much with cheaper meals or diversions, while upholding our values of date night and our marriage.
My emotional blind spot for this important area leeched my creativity in seeking good alternatives. While this expense wasn’t breaking the bank, the same phenomenon can take hold in many, sometimes more expensive areas.
Another area we value is our involvement in church ministry. We are volunteer leaders in our church and this means we spend money on retreats and social/ministry outings regularly. We are happy to do so, but have found some cheaper solutions. For example, sometimes we “pre-game” a restaurant outing and just order something small, or carpool or ride bikes to events when possible. We also choose to pay a babysitter so we can have less distractions during our home church meetings. So there are ways we’ve found to spend less while maintaining involvement, and there are also facets that we can’t really cut back on, or at least aren’t willing to.
How to Squint Out Your Blind Spots
First try to identify your value areas. And remember–you don’t get to pick everything! Common value areas include family, safety, health, education, faith, travel, adventure, gifts, technology, media, the arts, sports, friends, or experiences.
Now have a little brainstorming session, identifying possible alternatives to your current spending in your high-value areas. Be sure to ask your significant other or friends for ideas because it’s hard to think outside the box sometimes.
Please hear me: you might get creative, do some research, and find there are no better solutions or alternatives to your value areas. Maybe you recognize there are cheaper solutions, but you don’t have the time, inclination, or skills to adopt them. Then you would carry on as before, knowing that thing is really worth the price to you. That’s fine!
But a healthy dose of skepticism about our own values-based budgeting is helpful, because we’re almost inherently emotional about the things we value. And emotional money decisions aren’t always the wisest. It’s unrealistic to think any of us is going to do money perfectly every time, but I’d like the idea of reassessing and become more financially self-aware and solution-seeking over time.
What areas of your budget do you value most? Have you ever identified a blind spot in your values-based spending?
30 Responses to “The Blind Spot in Values-Based Spending”
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- November 22, 2016 -
- January 16, 2017 -
That’s so true. I definitely still have blind spots even though I’ve tried to weed them out as best I can. Our major one is still travel. We’ve travel hacked a bit to generate some savings, but otherwise we aren’t really willing to cut back much. We travel primarily to see family and for fun life experiences.
Travel is worth it in our opinion, though we try to keep the cost reasonable. I think the main thing is to keep trying to identify your blind spots.
A great topic. We value travel. My wife’s family lives in other states, so we often take trips to visit them. That doesn’t mean we can spend anything we want to take those trips. We still price shop and look for the best deals. We are also using credit card reward to reduce airline costs.
That’s great you are able to find less expensive ways to visit your wife’s family. That’s a high value in our book, too.
We only have one child (so far) & I started laughing about quality time before 9 pm. We took a day trip hiking in the mountains over the weekend. We don’t do a lot of the same things we did before we were dating, because parenthood changes things, but we try to have a date of some sort each month. We have been wanting to take a nice dinner out (like the old days) but haven’t because of several factors.
One of my blindspots is that our dates need to be “fancy” to be valid.
I’m glad to hear you’re still dating after kids! We have also gone back and forth on how “fancy” a date should be. There is something to finally getting out and wanting a treat after the hard work of parenthood. I think that’s just fine once in a while so long as you can afford it 🙂
I think most of us have these blind spots. We like to spend more on healthy food and once justified the higher price tag. Now that we are on the path to FIRE, we have found ways to lower that price tag by buying in bulk, etc. Identifying these blind spots are very important to us so we will have a much easier time of eliminating/controlling the expense. – Mrs. FE
I absolutely agree that everyone’s got blind spots. I love hearing how people have found less expensive solutions while maintaining the things they value.
Probably convenience food. Or maybe not, since I’m always looking at ways to keep it lower. (Currently, half the battle is trying to convince Tim that, no matter how tired he is, a zillion energy drinks a day isn’t okay — and isn’t going to help. Sugar crash may make it worse! Grumble grumble.)
Honestly, it’s probably less about value in a specific area and more about taking the easy way out when my fatigue or other health conditions flare up. I don’t always try hard enough to find a slightly better, if still suboptimal, solution.
Or it may just be how often I placate Tim. Hmmmm this will require some thinking.
Thanks for sharing your thoughts. I think valuing your health (like not over-doing it) and your husband’s preferences and needs are both good things to value. And you seem acutely aware of those areas and the pros and cons of those expenses, which is the important part.
My comment was longer but then the blog decided it looked spammy and I had to try again!
Travel is our thing, but I’ve learned to set a cap on how much we can spend in total on travel per year.
Spending time with family and friends is also a priority but it gets really complicated when they want to combine that with travel and get fancy ideas about the possible vacations. It feels like all budgeting sense goes out the window under the excuse that it’s spending time with family. Well, sure, but I don’t think we HAVE to spend time with them AND spend $7,000 to make that happen, do we? (Spoiler: No, we don’t!)
Sorry about that; thanks for trying again! That’s a great idea to set a cap on your value of travel. We also set an annual travel budget. We have also experienced the over-priced proposals for traveling with others.
I’m going to admit that we pay for conveniences, and there are times I think we are justified, and there are times I think it’s as you say – a blind spot. For example, we pay to have our lawn mowed. I think this is pretty reasonable – my husband has terrible allergies, and so he’ll be sick all summer and fall if he has to do yardwork. As someone who works 50-60 hours a week (with two small kids), I don’t have time to do it. So we hire it out!
But, I see that we pay for convenience food or we will do all our clothes shopping online, because it’s convenient. Not because we couldn’t do better, plan ahead, and save more money. You hit on a good topic here.
Good examples. I agree that there are times it’s well worth it to hire someone else. And other times expenses can be minimized by planning. Thanks for sharing your thoughts.
Great post, I actually do try to budget based on my values (although financial security is one of them) and then try to make each line item more efficient or effective. I dislike the pursuit of extreme savings rates just for the sake of it and piling a mass of money for the sake of it. it
Blindspot is probably travel, but we are consciously spending on that as we value it highly.
I really like how you describe the way you budget and seek greater efficiency rather than extreme savings rates. I think that misses the point of money, and can be an interesting metric but makes a very bad controlling goal. Travel seems to be a common value emerging, and one I think is well worth it, within reason.
“budget failure justification” – Ouch! I’d never heard that one before. I suspect I’m guilty of it. The one emotional value I’ve had to work on most has to do with spending on my children. It has generally been about small ticket items – like a snack at Tim Horton’s – but these small ticket items add up. I’m doing better now. As for getting creative, when my husband and I first started our journey out of debt, we couldn’t justify our expensive week-end get-away at a resort for our anniversary. For two years, we missed our trip – and then decided that we’d still get away – camping. But camping with salmon steaks and fillet mignon. So much cheaper than the resort, but lovely. (It was a perfect example of the “fruclassity” concept.)
Spending on kids is such a common and tempting value area. I think we are just on the cusp of navigating that as they get a little older. I love that you found a getaway middle ground–“glamping” as we sometimes call it. Sounds like your value was more about the quality time together than the exact location.
Enjoyed reading this.
One area we value and prioritize to spend money on is tax advice. A combination of fairly complex situation dealing with income pieces like stock options for each of us. And being burned in the past with an incorrect tax filing submission (not long after we landed in the US) and had our taxes done by, let’s say, somebody who was not up to speed with tax considerations related to my international relocation package….
We are comfortable to sticking to this until our tax situation gets much simpler which it will after we hit FIRE in two years. Or at least soon thereafter.
Sounds like money well spent! Taxes are something you’d want done right.
We’ve cut most of the extras out of our budget. Honestly, we could really use a date night. All of the extra hustling and effort to save money is starting to take a toll. We spend money on having fun with the kids – a trip to the zoo or something fairly inexpensive like that – but we don’t spend money on dates. As committed as we are to the future, we can’t forget about the present and giving our marriage some attention too.
I couldn’t agree more that it’s important to take a break sometimes and spend quality time with your spouse. That sounds like a value you could designate more resources for. I completely understand how hard that can be to schedule and prioritize, though.
Good points! I highly value my health so I don’t mind spending money on good food. That being said, I tend to buy a lot of extras that don’t really add MORE value, but I like them. Like kombucha. Sure fermented foods/drinks is good, but not necessarily at almost $4 per bottle! I could in theory make my own, or go for cheeper solutions. Apple cider vinegar is dirt cheap and equally as healthy!
Good examples, Tonya. I agree that healthy food is worth some money, but there are often good, inexpensive alternatives.
I love this post — such a different but important way to think about spending. We had a big example of this, when we decided to focus on buying only healthy foods, and cutting out the cheaper, coupon-purchased junk. We sort of acted like any spending in the name of healthy food was okay, and our grocery bill ballooned quite a bit. Once I finally realized how much we were actually spending, I got quite a bit more creative about cutting that back, and now we eat much more healthily, but only spend a little more than we used to in our coupon days. 🙂
Healthy food seems like a common culprit, and it makes sense why since one’s health is certainly valuable. That’s great you’ve found less expensive ways to eat equally healthy food. I agree that a lot of the coupon items are junk and not worth buying.
Very thought-provoking post! Hmm, I wonder if pets count here? I consider our pets to be part of our family, and I’m happy to pay for high-quality food and veterinary care. But I learned over time how to manage some of their chronic illnesses at home, without running to the vet the moment I notice they’re not feeling well. Geriatric kitties with chronic illnesses can be very expensive!!
I would also say that food is an area where I spend more than I have to. I try to get organic dairy products (at least milk and yogurt), and having lots of produce is important to me. I also pay more for humanely “raised” eggs.
I think pets are a good example. That’s great you’ve found affordable ways to care for certain illnesses. I’m sure it’s nice to feel more confident about caring for them yourself at times.
Healthy food is definitely valuable if you value your health. I find fresh local eggs to be much tastier, too!