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Value-Based Spending

Value-Based Spending

This, in itself, could fill a book. Masters of time and lifestyle management, such as Stephen R. Covey (author of "7 Habits of Highly Effective People"), teach us that day planning is not just making a "to do" list and checking tasks off during the day. It is a process of identifying what you most value in life, then identifying the goals that will fulfill those values, and then each morning, planning your day's activities to accomplish the goals which fulfill your values. Then, you are able to stay focused on that which will bring to pass what you most want out of life, and not be distracted by things that are urgent but unimportant.

Doesn't a similar process apply to our finances? We identify what money-related items most matter to us, make goals to fulfill them, and then organize our finances and shopping/spending habits to accomplish them. As an example, our core financial values might be an adequate and lovely home, ability to buy the food and staples we need, adequate health insurance, retirement funding, staying debt-free, educating our children, family vacations, hobbies, etc. Obviously, the goal planning to realize this takes time, thought, monitoring, and various tools, and is done yearly, monthly, and daily.

Value-based spending, then, would suggest that we don't just go to the store and fill our carts impulsively. The result of such is buying products we don't need, spending beyond our means, cluttering our homes, and sabbotaging the realization of our financial goals. Value-based spending means that we have identified and written our financial values, have converted them in to long and short term goals, have written plans supporting those goals, and then, before a shopping trip, we plan the stores we will visit and the items we will purchase. It is useful to record these items on a shopping list (especially purposefully-designed ones such as found in Mrs. A's Coupon Organizer which tie in coupon savings). Shopping from such a list prevents impulse buying and keeps you focused on your larger values and finances their realization.

Wouldn't it be a shame to never realize your dreams because you can never pass by the Twinkies? I, myself, can pass by the Twinkies (it's the donuts that get me):)

Copyright © 2007, Paul Stout, Mrs. A's Corporation

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