Values Based Budgeting

Jan 12

Values Based Budgeting

[00:00:30] Happy new year. I hope that you had a wonderful holiday and that your kickoff to 2023 has been absolutely . Fantastic. I do not know about you, but like 20, 22, it went by in like the blink of an ice. So many things happened last year that I feel like I woke up. I blinked and here we are almost halfway through January and it's just like,

[00:00:54] So wild how quickly time goes by. But 2023 is [00:01:00] absolutely your year to tackle all of your financial goals and really shift your relationship with money in a way where you feel so good, confident, and empowered by your financial decisions.

[00:01:13] And one thing that I've been really reflecting on with The thrive or the last couple of months is the question, how can stapled thrive, bring a more mindful and personal approach to money management? So a couple of things are happening as we are kicking off the new year. The first thing I alluded to in the last podcast episode about financial minimalism is a free 30 day financial reset challenge.

[00:01:41] And the 30 day financial reset is designed to help you spend less on shit that you don't actually care. About and put your time, money and energy into things that bring true. Joy and value to your life.

[00:01:52] The link to join. The challenge is in the show notes of today's podcast episode. I am in the second week of this [00:02:00] challenge and it has been really powerful, just like going back and resetting my intentions around money. And. Definitely as we kick off the new year, get out of the holidays when we're just pressured to buy and spend so many things. It is really refreshing to hit that reset button.

[00:02:18] And think more mindfully about our money. So here are the three rules of the challenge, and this is all going to directly correlate to today's podcast episode, which is on values based budgeting. So the information and the actions that you take during this 30 day, financial reset is created to help you create a values-based budget once the one month inside of the challenge is done.

[00:02:44] Okay. So rule number one. Of the 30 day financial recite is to track your spending every single day. This is really important at the end of every day, set aside five minutes to log everything that you've spent money on, and this will help you understand where your money is currently going and make informed financial decisions [00:03:00] going forward.

[00:03:01] We're going to come back to that idea in a second. Rule number two is to declutter one thing per day. So I feel like after the holidays, it's just, I just accumulate so much stuff. Like it happened so quickly. Maybe there's even gifts and they turn into duplicates of things that we already own. And so like one thing gets to be decluttered. I always just feel like.

[00:03:20] We have so much stuff after the holidays. And I'm like ready to start purging and like organizing my space, simplifying my space so that it's not taking up so much mental energy. So. That's why the second rule is declutter. One thing per day, remove one thing from your home that you no longer want or need. What you decide to declutter is totally up to you. It can be big or small. The important thing is that you get rid of one item.

[00:03:44] So far, I've gotten rid of a Tuscan serving collection from like the 1980s that are relative like re gifted us. Cause they were like, you host more than we do. Like you'll. Take advantage of this. And I'm like, , usually I would feel guilty, decluttering [00:04:00] something that was just given to me. But then I realized this was given to us because it was literally like decluttered by someone else. If we're not going to use it, there's no reason that we need to hold on to it.

[00:04:08] I've also decluttered some plates, some mugs, um, linens, stuff like that. And it's like, so freeing, and that was just week one of the things that I've decluttered inside of the challenge. So I'm very excited to get rid of more things. And then rule number three is to pause before buying. And this is going to relate to the values based budget that we're going to talk about as well.

[00:04:29] A major goal of the 30 day financial reset is to bring more mindfulness and intention into your spending each day, which can then translate to bringing more mindfulness and intention into your overall financial plan. AKA your budget. So before making a purchase, pause and ask yourself the three following questions, how am I feeling right now?

[00:04:47] Am I feeling sad? Tired, stressed, hungry, et cetera. Is this purchase aligned with my values or my why? And do I need this thing right now? Or can it wait a few days, weeks, months, et cetera.

[00:04:59] [00:05:00] So when you sign up for the 30 day financial reset, you will get a free workbook, which has over 40 pages of worksheets, information, tips, and tricks and so on and so forth. And I have like, I have my workbook right in front of me. I printed it off so that I can create like content and stuff around it during the challenge.

[00:05:19] But I have turned to page seven. Of the workbook right now. And page seven and eight are going to help you not only reflect on your spending, but you can also use it to create your values-based budget down the road.

[00:05:32] And basically what page seven and eight in the workbook are designed to help you do is identify your core values because your values, these are the things that are driving you each day. And they are one of the biggest measures that we have in our lives.

[00:05:46] Of the things that we can accomplish and achieve as individuals, they represent our desires, the things that we believe in how we relate and interact with the world around us and how we want to live our lives and be remembered and values are pretty [00:06:00] important things. And I believe that money is a tool to build a life that's aligned with your values.

[00:06:07] So it's really important to know what those things are, so that you can make sure that you are making financial decisions that are aligned truly aligned with the things that. Are most important to you?

[00:06:16] So the challenge, one of the getting started actions is to identify your values and start reflecting on them. And then once you're done with a 30 day financial reset, you can start creating your values based budget.

[00:06:30] So let's dive in to what a values-based budget is because I'm like, so jazzed up about chatting about this because it's really one of the central themes of everything that I teach as a financial counselor.

[00:06:41] Okay. So, I don't know. If this relates to you, it probably does, honestly, because it relates to me with like my financial journey as well. And I've heard this from so many clients that I've worked with and people in this community, but a lot of people hate the idea of creating a budget because they associate it with something that's telling them what they cannot [00:07:00] spend money on.

[00:07:01] When at the same time, I think we can all agree that making a plan for your money and your finances is a critical part of reaching your financial goals. But we don't want a budget because we feel like they're really restrictive. They are holding us back from being able to spend money on. And really what I think that, that comes down to is traditional quote, unquote, traditional budgeting, which kind of sucks. And here's why.

[00:07:28] With a traditional budget. Think like the, these different financial rules, like the 50, 30, 20 rule where you spend 50% of your income on your living costs 30% on your discretionary spending and 20% goes towards savings investments. Um, financial goals. And when we think about something like the 50, 30, 20 rule, and I'm not hating on this rule specifically, I'm using it as an, as an example here.

[00:07:55] I think that these rules are really helpful reference points when we're [00:08:00] first learning how to manage our money and make financial decisions. And I do believe that knowing what these rules of thumbs are, are helpful when someone is building up financial literacy and I do share and talk about these rules inside of my programs.

[00:08:17] But these rules all have one thing in common, they are a one size fits all approach to money when you, on the other hand are a unique individual. As I mentioned before, your money as a tool to build a life that you love and you get to use your money on the things that add value and joy to your life without feeling guilty about it.

[00:08:38] So we shouldn't be copying and pasting someone else's financial template, like the 50, 30, 20 rule, 80 20 rule. I'm pretty sure there's like a. 40 40 20 year. I don't know, like there's so many different rules that we'll, we'll hear floating around. And I ask the question, like why are we trying to [00:09:00] squeeze our financial lives into this template that wasn't built or created with you in mind in the first place?

[00:09:07] And that's where values based budgeting comes into play.

[00:09:10] Values based budgeting is when you make a plan for your money. That's based on things that you, yourself, as an individual genuinely care about. Not what all these other financial gurus say that you should care about, or the goals that you should be working towards, not what your parents say that you should care about or be working towards.

[00:09:27] Like, this is what you value and care about. And they're basically three different steps to creating a values-based budget.

[00:09:35] First is gaining clarity on your values and beliefs about money. We do that in the 30 day, financial reset on pages seven and eight. There's a worksheet there and a couple other worksheets throughout the entire workbook to help you come back and reflect about that.

[00:09:49] But you're going to ask yourself questions, like, what are your core values? What things do you spend money on that like really lights you up, but like you just love spending money on these things and what [00:10:00] financial goals will help you feel happy and work towards that dream life that you want to live.

[00:10:07] Number two is understanding where your money is currently going. That's a huge part of the 30 day financial reset is tracking your spending so that you're able to understand where your current financial spending habits are. Then once, you know what you're spending money on, you can start looking at that information and ask yourself what adjustments can I make to my spending so that my money is working for me in a way that feels really good?

[00:10:34] We're not tracking our spending to feel guilty or embarrassed or ashamed about the money that we're spending or where our money's going. We are tracking, spending to gather information so that you can ask yourself: how can I use my money in a way that authentically aligns with who I am as a person and the things that I want to do in my life?

[00:10:55] And then the third thing once, you know, your values and beliefs [00:11:00] about money and you understand where your money is going, step three is to make a plan for your money that aligns with the things that you care about and makes you happy.

[00:11:08] And I think with traditional budgets, you know, you've probably heard things like, oh, if you're paying off debt, you should eat beans and rice every day until you're debt free. Or you need to cut back all costs in order to be saving up for this specific goal. Like there's so many sheds that are floating around in the financial space, but personal finance is not one size fits all. You get to use your money in a way that feels good for you by making intentional and mindful decisions.

[00:11:38] This doesn't mean blindly spend on like every single sale or given to like every single impulse purchase that comes along. And that's something that we talk about inside the 30 day, financial reset as well. there's one sheet in there talking about like how to avoid impulsive spending and the goal is to really identify the spending and ways that you can use [00:12:00] your money that feels really good for you. And then you can use that information to make a plan accordingly.

[00:12:05] Let's talk about what a values based budget can look like.

[00:12:09] So let's say that you love to travel. It's super important that you get to do and enjoy the thing that you love. So in your budget, create a travel sinking fund, open up that space to send money towards this thing that you really love. And even if you are building an emergency fund paying down credit card debt, it is 100% okay to send money towards this thing that you genuinely care about.

[00:12:34] And I want to tell you a little story about a client that I've been working with since 2021. Who at the start of our time working together, she had $35,000 of credit card debt and she was living paycheck to paycheck. She knew that she wanted to pay down her credit card debt as quickly as possible, but she loves to travel. Like I genuinely don't think I've met someone that loves to travel as much as this client [00:13:00] does. And she loves taking these like, Beautiful amazing dream vacations with her family. So over the last two years of us working together, we really took, took a look at this values based approach to budgeting and focus on building up intentional and mindful spending habits and creating a plan for her money that helped her build an emergency fund, which allowed her to pay for several unexpected vet visits and two surprise home appliance replacements in cash, which like those are really pricey. So the fact that she had the emergency fund to pay for them and cash is a huge, huge win.

[00:13:36] She was also able to save for traveling. She's taken multiple trips during the last two years of working together and tackle her debt.

[00:13:45] And last week we had our first one-on-one call together for 2023. And she is on track to be debt-free by this November. Take not one, but two luxury vacations this year, finish off 2023 [00:14:00] with over $5,000 inside of her travel fund, and have over $10,000 set aside for savings.

[00:14:06] Like, I love this story because I think it is the perfect example of what values based budgeting can look like.

[00:14:13] And there are so many different people out there that are saying, while you're paying off debt, you should not be spending any extra money on anything besides your debt repayment. And I just do not agree with that because we still have things that we love and enjoy. And you know, every single person is different. Some people value paying off debt so much that it does genuinely feel good for them to pay all of their money towards their debt repayments and become debt free as quickly as possible. But that's not the case for everyone and I know that that was the case for myself and if I had approached my budget from this super intense, restrictive view, I know that I would not stick to it. I would not have stuck to the plan, [00:15:00] and I would've missed out on a lot of amazing opportunities and experiences.

[00:15:04] And when thinking about this client here, I am so glad and proud of her, that she was able to have all of these amazing trips and experiences while also working towards and making amazing progress towards her financial goals and not feeling like she needed to miss out and sit on the sidelines for two plus years while she was really working towards them.

[00:15:27] So that's an example of a travel sinking fund. If you love getting brunch with friends every weekend, another example, add it to your budget. Include that social time, because grabbing brunch with friends or grabbing a latte with friends at the coffee shop, that's not just about spending money on the food. Like that experience is also about getting together with people that you love and catching up with them and spending time with them.

[00:15:52] So that's where you really want to reflect on your values and ask yourself, how can I use my money in a way that feels really, really good?

[00:15:59] [00:16:00] And I also think that restaurants, restaurant spending is one of those categories where it could fit into different areas of the things that we place our value on, depending on who you are.

[00:16:11] And I'm not saying that any decision that you make with your money is bad. It just comes down to knowing what you value as an individual.

[00:16:20] So, for example, when we're thinking about grabbing brunch with friends, That can really be tied to spending quality time with your loved ones. Grabbing brunch at a restaurant could be different than grabbing breakfast to go on the way to work because you had a super busy morning and didn't have time to make any breakfast for yourself at home. The second would fall more into a convenience type of purchase, which is also a value that people can have with their spending.

[00:16:49] It is okay to spend money on things that are convenient to you and help you save time. And that's really where this question comes from of [00:17:00] how can I use my money in a way that feels really, really good for me, so that we're taking the pressure and the guilt and the shame away from these purchases that we are making.

[00:17:11] We know that they're aligned with the things that we care about, and that's really what values based budgeting is all about.

[00:17:18] And I firmly believe that balancing fun and your values while working towards financial goals, like paying off debt, building an emergency fund, et cetera, is a critical part of building a values-based budget because it also helps you avoid financial burnout, not feeling super restricted by your budget, because I know for myself that when I'm feeling really restricted by anything, I am not very likely to stick to that thing for very long.

[00:17:45] And that's exactly what we want to avoid when it comes to making this plan for our money, and that's one reason why I love values based budgeting so much because when you mindfully use your money on the things that you truly care about, that's when [00:18:00] you start feeling confident and empowered by your finances.

[00:18:04] So the 30 day financial reset is really designed to help you take those first initial steps to building these intentional and mindful habits with your spending. And you can use that information to start implementing it into creating a values-based budget of your own.

[00:18:21] And if you're looking for additional support outside of the 30 day financial reset, when it comes to managing your money this year, leveling up your financial literacy, how to use your money in a way that feels authentically aligned with who you are while also paying off debt, increasing your net worth sustainably, saving money, learning about these big, important financial concepts, like investing, balancing multiple financial goals, planning for major purchases, like buying a house card, dream vacation, et cetera.

[00:18:51] The wealth building boot camp is getting a giant major make-over this year, the first module actually of the wealth filling [00:19:00] bootcamp revamp is dropping next week. I'm so excited about it.

[00:19:03] And basically the more that I've worked with clients and taught financial education, the more that I felt that there's a missing piece to the puzzle of financial education in general, because as we talked about today, personal finance is not just about learning concepts, like budgeting, debt, repayment, and investing. Like obviously those concepts are super important. But we have to actually implement those ideas. And in order to implement, we need to understand our values and beliefs about money. We have to understand our money story, overcome those feelings of shame and guilt about our past financial decisions and identify how you can use money as a way to build a life that you love.

[00:19:44] And this idea that there is no one size fits all approach to personal finance, is really driving the revamp of the wealth building boot camp, because it is time to build a plan for your money that is centered around you.

[00:19:58] So the revamp of the [00:20:00] program, it's breaking down into three different parts. Part one is your money and your life. We're going to talk about things like uncovering your money story, letting go of financial guilt and shame, using money as a tool to build your dream life, setting values based financial goals. You can hear like a theme of everything that we talked about in today's podcast episode. How to feel confident and empowered with every single dollar you spend. And building an abundance mindset with money.

[00:20:23] And once you've really gotten a solid picture of how you want your money to look and function inside of your life as a whole, that's when we move on to part two, which is building your financial system, we talk about what is your net worth and how to grow it consistently.

[00:20:37] Everything you need to know about saving money, how to say where to say, like, we're going to talk about all of it, how to pay off debt as quickly as possible without eating beans and rice every day. My favorite budgeting systems and strategies so your money can work for you and do its job on autopilot and how to balance multiple goals at once and stick to your plan, no matter what life throws at you.

[00:20:58] And once we've tackled that [00:21:00] information, that's when we tie the bow on top. And we talk about building wealth. We're going to talk about the big financial wins to be focusing on instead of worrying about pinching every single penny, the basics of investing so that you can start planning your financial future with confidence. Planning for major purchases like buying a house, car vacation.

[00:21:19] Dream wedding, et cetera. And then how to show up for yourself and continue the momentum even when life gets hard and sticky.

[00:21:27] So if this is the year where you are ready to feel empowered by your money, instead of restricted by it, you want to use your money in a way that feels authentically aligned with who you are and build wealth while embracing yourself. And you want that support and accountability that comes from being part of an amazing community of women that are having conversations about money, taking ownership of their finances and taking those action steps each and every day, then the wealth building bootcamp is for you. I would love to see your application.

[00:21:59] The [00:22:00] revamp module one inside, it drops on at January 19th. And I am just like, so stinking, excited to share the revamp of this program with you. It is going to be so amazing, just understanding all of these different parts of our finances

[00:22:14] and there are some other things in my back pocket that I'm planning for it later on in this year, but that's, what's happening so far in January.

[00:22:21] We have the free 30 day financial reset, which definitely, definitely sign up for that. And then if you're looking for that added support, I would love to see your application for the Wealth Building Bootcamp

[00:22:33] that is all that I have for you today. I will chat with you next week. Bye.

Shownotes

In today's podcast episode, Charlotte talks about Values Based Budgeting, which is when you make a plan for your money that’s based on the things that you care about.

We talk about:

Gaining clarity on your values and beliefs about money
Understanding where your money is currently going
Making a plan for your money that aligns with the things that you care about and make you happy

The 30 Day Financial Reset is designed to help you understand your values and beliefs about money and help you understand where your money is going so that you can make a value-based budget once the 30 Day Challenge is over!

CLICK HERE to join the FREE 30 Day Financial Reset!

Disclaimer: The content and information provided on this podcast is for educational purposes only and does not constitute professional mental health, financial, legal, or tax advice. For recommendations on your specific financial situation, you must additionally seek the services of an appropriate licensed mental health, theraputic, legal, accounting, tax, or investment professional.

Interested in working with Charlotte?
The Wealth Building Bootcamp is getting a MAJOR revamp this year! This 15-week group coaching experience designed to teach you how to heal your relationship with money, build wealth, pay off debt, and live the life of your dreams.

Values Based Budgeting

Values Based Budgeting

Shownotes

What Does It Mean to Be Successful With Money?

Creating More Space Through Financial Minimalism