Why Values-Based Spending Matters and How to Start Aligning Your Finances
Hey there, Ray Cole here from Ray Cole Financial! Let’s talk about something that can transform the way you handle your money: values-based spending. I used to spend without much thought—grabbing takeout, buying gadgets, or splurging on things that didn’t really matter to me. But a few years ago, I realized my spending wasn’t reflecting what I truly cared about, like quality time with my family or building a secure future. That’s when I discovered values-based spending, and it changed everything. In this guide, I’ll explain what values-based spending is, why it matters, and how you can start aligning your finances with your core values, with practical steps, real-life examples, and tips to make it work for you. Before we dive in, a quick disclaimer: I’m not a certified financial advisor, just a finance enthusiast sharing what’s worked for me. For personalized advice, always consult a professional. Let’s get started on making your money work for what truly matters to you!
What Is Values-Based Spending?
Values-based spending is a mindful approach to money where you intentionally spend in ways that align with your core values—the things that matter most to you in life. Instead of spending impulsively or based on societal pressures, you prioritize purchases that support your goals, passions, and beliefs. For example, if family is your top value, you might choose to spend on a memorable vacation with your kids rather than a flashy new car. If financial security is key, you might focus on saving and investing over buying the latest tech.
This approach isn’t about deprivation; it’s about clarity. It’s about saying “yes” to what brings you joy and fulfillment while saying “no” to things that don’t. When I started practicing values-based spending, I cut back on meaningless purchases—like $200 a month on takeout—and redirected that money to experiences that mattered, like a $1,500 family trip that created memories we still talk about years later.
Why Values-Based Spending Matters
In 2025, with rising costs and endless temptations to spend—think social media ads and easy online shopping—it’s more important than ever to be intentional with your money. Here’s why values-based spending can make a big difference in your financial life.
It Reduces Financial Stress
When your spending aligns with your values, you feel more in control of your money. You’re not wasting cash on things that don’t matter, which means less guilt and fewer “where did my money go?” moments. I used to feel stressed after splurging on things I didn’t need, but once I focused on my values—like saving for my kids’ future—I felt a sense of purpose that eased my anxiety.
It Helps You Achieve Your Goals Faster
Values-based spending ensures your money is working toward what you care about most. If your value is financial independence, you might prioritize investing over buying a new TV. For example, redirecting $300 a month from non-essential spending to investments at a 7% return could grow to $55,000 in 10 years. I started putting $200 a month into a Roth IRA instead of random purchases, and after 5 years, I had $14,000 growing for my retirement.
It Increases Fulfillment
Spending on what you value brings more joy than mindless purchases. Studies, like one from the Journal of Consumer Psychology in 2023, show that people feel happier when their spending reflects their values—whether that’s travel, charity, or education. When I spent $500 on a woodworking course because I valued creativity, it brought me more satisfaction than any gadget ever did.
It Encourages Mindful Habits
Values-based spending forces you to think before you buy. You’ll ask yourself, “Does this align with my values?” instead of buying on impulse. This mindfulness can lead to better financial habits overall, like budgeting and saving. I used to buy clothes I didn’t need just because they were on sale—now I pause and consider if they fit my priorities, which has saved me hundreds.
Step 1: Identify Your Core Values
The first step in values-based spending is figuring out what matters most to you. Your values are the guiding principles that shape your life—they might include family, health, financial security, adventure, creativity, or giving back to your community.
Reflect on What Brings You Joy
Think about the times you’ve felt happiest or most fulfilled. What were you doing? Who were you with? For me, some of my best moments have been family vacations and quiet evenings working on woodworking projects. That told me family and creativity were two of my core values.
Ask Key Questions
To dig deeper, ask yourself:
What do I want my money to achieve in my life? (e.g., freedom, security, experiences)
What purchases have brought me lasting happiness? (e.g., a trip, a course, a donation)
What do I regret spending money on? (e.g., unused subscriptions, trendy items)
I regretted spending $1,000 on a gaming console and accessories I barely used—it didn’t align with my values of connection or growth. On the other hand, spending $300 on a family camping trip felt incredibly rewarding.
Write Down Your Top 3–5 Values
List your core values to keep them front and center. Mine are family, financial security, creativity, health, and giving back. Yours might be different—maybe travel, education, or spirituality. There’s no right or wrong; it’s about what’s true for you.
Step 2: Audit Your Current Spending
Now that you know your values, it’s time to see if your spending aligns with them. This step involves taking a hard look at where your money is going and identifying areas to adjust.
Track Your Spending for a Month
Use a free app like Mint or a simple spreadsheet to track every dollar you spend for 30 days. Categorize your expenses into needs (rent, groceries), wants (dining out, entertainment), and savings/debt. I tracked my spending and found I was spending $400 a month on wants—like takeout and streaming subscriptions—but only $100 on savings, which didn’t match my value of financial security.
Compare Spending to Values
Look at your spending and ask: Does this reflect my values? For example, if health is a priority but you’re spending $0 on fitness while dropping $200 on dining out, there’s a mismatch. I realized I was spending $150 a month on subscriptions I rarely used, while I valued creativity but wasn’t investing in tools or classes for my woodworking.
Identify Areas to Cut
Find expenses that don’t align with your values and consider cutting them. Maybe you’re spending $50 a month on a gym membership you don’t use, but you value travel—redirecting that $50 could add $600 a year to your travel fund. I cut $100 a month from streaming services and random purchases, which let me save more for family experiences.
Step 3: Create a Values-Based Budget
A values-based budget ensures your money supports what matters most to you. It’s not about restricting yourself—it’s about prioritizing.
Use the 50/30/20 Rule as a Base
Start with a simple budgeting framework: 50% for needs, 30% for wants, and 20% for savings/debt. Then, adjust your wants and savings categories to reflect your values. For example, if you take home $3,000 a month:
Needs (50% = $1,500): Rent ($800), groceries ($300), utilities ($200), transportation ($150), insurance ($50).
Wants (30% = $900): Dining out ($200), entertainment ($100), hobbies ($200), travel ($400—because you value adventure).
Savings/Debt (20% = $600): Emergency fund ($300), retirement ($300—because you value financial security).
Prioritize Value-Driven Spending
Within your wants category, allocate more to what aligns with your values. If family is a top value, you might spend $300 on a family outing instead of $300 on new clothes. I adjusted my budget to put $200 a month toward family experiences and $100 toward woodworking supplies, while cutting back on dining out to $100.
Automate Savings for Your Values
Set up automatic transfers to support your value-driven goals. If you value financial security, automate $200 a month to an investment account. If you value travel, save $150 a month in a “Travel Fund.” I automate $150 a month to a savings account for family trips—it ensures I’m always working toward that goal.
Step 4: Make Spending Decisions Mindfully
Values-based spending requires you to think before you buy. Here’s how to make mindful decisions that align with your priorities.
Pause Before Purchasing
Before buying something, wait 24 hours and ask: “Does this support my values?” If it doesn’t, reconsider. I once paused on a $500 TV purchase and realized I valued family time more—I used that money for a weekend getaway instead.
Focus on Quality Over Quantity
Spend on fewer, higher-quality items that align with your values. If you value health, buy a $100 pair of running shoes that’ll last, rather than $100 on fast food. I invested $200 in a high-quality woodworking tool instead of $200 on random gadgets—it brought me more joy and lasted years.
Say No Without Guilt
It’s okay to decline expenses that don’t fit your values—like an expensive night out if you’d rather save for a goal. I started saying no to $50 bar nights with coworkers, which let me save $600 a year for things I cared about more, like my kids’ education fund.
Step 5: Reflect and Adjust Regularly
Your values and financial situation will evolve over time, so it’s important to check in regularly and adjust your spending as needed.
Review Monthly
At the end of each month, look at your spending and ask: Did I prioritize my values? Where can I improve? I review my budget on the 1st of every month—it takes 15 minutes and keeps me on track.
Celebrate Wins
When you spend in alignment with your values, celebrate! If you saved $1,000 for a value-driven goal, treat yourself to something small that also aligns—like a $20 family movie night. I celebrated saving $2,000 for a family trip by taking my kids out for ice cream—it felt rewarding without derailing my goals.
Adjust as Values Change
As life changes, so might your values. If you start a family, you might shift from valuing travel to valuing education. I used to prioritize adventure, but after having kids, I focused more on financial security and family experiences, which meant saving more and spending less on solo trips.
Real-Life Examples: Values-Based Spending in Action
Let’s see how values-based spending works for three guys at different income levels.
Mike’s Story: Family First ($50,000 Income)
Mike, a 35-year-old electrician earning $50,000, identified family and health as his top values. He audited his $2,500 monthly budget and found he was spending $300 on wants like video games and dining out, but only $50 on family activities. He cut $200 from gaming and dining, redirecting it to a $150 family fund and $50 for a gym membership. In a year, he saved $1,800 for a family camping trip and felt healthier, which aligned with his values and brought him closer to his kids.
Tom’s Story: Financial Security Focus ($80,000 Income)
Tom, a 42-year-old manager earning $80,000, valued financial security and creativity. He audited his $5,000 monthly budget and saw he was spending $500 on wants—$300 on gadgets and $200 on dining out—but only $200 on savings. He cut $300 from gadgets, redirecting $200 to investments and $100 to art supplies for his painting hobby. After 2 years, Tom had $4,800 in investments and a renewed passion for painting, which reduced his stress and aligned with his goals.
Chris’s Story: Giving Back ($120,000 Income)
Chris, a 50-year-old consultant earning $120,000, valued giving back and adventure. He audited his $7,500 monthly budget and found he spent $1,000 on wants—$500 on luxury items and $500 on dining—but only $100 on charity and $200 on travel. He cut $400 from luxury items, redirecting $200 to a local charity and $200 to a travel fund. In 3 years, he donated $7,200 to causes he cared about and saved $7,200 for a trip to Europe, feeling more fulfilled than ever.
Tips for Successful Values-Based Spending
Here are some strategies to make values-based spending work for you:
Start Small: If you’re new to this, pick one value to focus on—like family—and adjust one spending category to match. I started by cutting $50 a month from dining out to fund family outings.
Use Visual Reminders: Keep a list of your values in your wallet or on your phone. I have a note on my phone that says “Family, Security, Creativity”—it reminds me to spend intentionally.
Involve Your Family: Share your values with your partner or kids to align your household spending. My wife and I agreed to prioritize family experiences, which made budgeting easier.
Track Your Joy: After a purchase, note how it made you feel. Did that $100 concert with your kids bring more joy than $100 on clothes? This helped me see that family spending brought me the most happiness.
Be Patient: Aligning your spending takes time. Don’t stress if it’s not perfect right away—focus on progress. It took me 6 months to fully adjust my budget, but the clarity was worth it.
Common Mistakes to Avoid with Values-Based Spending
This approach is powerful, but there are pitfalls to watch out for:
Ignoring Needs: Don’t cut essentials like rent or groceries to fund your values. Always cover your needs first. I once overspent on a family trip and struggled with bills—now I make sure my basics are covered.
Feeling Guilty: If you spend outside your values occasionally, don’t beat yourself up. Reflect and adjust next time. I bought a $200 jacket impulsively but used it as a lesson to pause before future purchases.
Not Reassessing Values: Your values might change—don’t stick to an outdated plan. I used to value travel but shifted to family after having kids, which changed my spending priorities.
Overcomplicating It: Keep your budget simple. You don’t need 20 categories—just focus on your top values. I tried tracking every penny at first, but simplifying to 5 categories made it sustainable.
Building a Lifelong Values-Based Mindset
Values-based spending isn’t a one-time task—it’s a mindset you cultivate over time. As you practice this approach, you’ll find that your relationship with money becomes more positive and purposeful. You’ll spend less on things that don’t matter and more on what brings you joy and fulfillment. For me, this shift has meant more family memories, a growing retirement fund, and the satisfaction of pursuing my passions. It’s not about perfection; it’s about progress and aligning your money with the life you want to live.
Start Aligning Your Spending with Your Values Today
Values-based spending can transform your financial life by reducing stress, helping you achieve your goals, increasing fulfillment, and encouraging mindful habits. Identify your core values, audit your spending, create a values-based budget, make mindful decisions, and reflect regularly to stay on track. Start small, and over time, you’ll find your money working for what truly matters to you. For more financial tips, check out my other posts on Ray Cole Financial, like how to budget or develop a positive money mindset. What’s one value you’re excited to prioritize in your spending? I’d love to hear about it—feel free to share in the comments below, and let’s keep the conversation going!
