Finding ways to maximize what you can do with your income is an important part of money management. While it’s easy to assume that involves sticking to strict budgets, improving your finances doesn’t necessarily mean you have to stop buying non-necessities altogether — you just have to make sure you’re avoiding frivolous, mindless spending so you have room to make purchases you genuinely love and care about. Of course, not every single purchase has to have meaning behind it, but it can be easy to fall into the trap of making impulse buys for instant gratification that you won’t even care about after a short period of time. All that money can really add up and before you know it, you won’t have enough cash left over for the experiences and things you truly value. “Spending based on your values means making choices that reflect what is important to you,” says Maia Monell, co-founder and chief growth officer of the Nav.it app. “It means investing in the things that will bring you joy, satisfaction, a sense of accomplishment, and purpose.” Keep in mind that spending money based on your values can look different for everyone. For one person, making a satisfying purchase can mean splurging on higher-quality ingredients because cooking a good meal is the favorite part of their day. For someone else, it could mean paying a premium for sustainable fashion items because they like supporting businesses aimed at helping the environment. The return on investment of a value-based purchase isn’t always tangible — sometimes, it’s more about gaining knowledge, having a stronger sense of community or getting to use your creativity. It’s important to draw the distinction between the things you love buying and the things that just eat up your cash flow. “Spending money on things you don’t care about might mean you will miss out on opportunities and experiences to invest in the things that truly matter to you,” Monell explains. Below, Select shares some of Monell’s best tips for making sure you’re spending money with your personal values in mind.
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1. Have an idea of what your values are
“The first step is to get clear on what matters most to you,” Monell says. “This could be anything from family to travel to financial security. Once you know your values, you can start making choices that reflect them.” For instance, if being with family brings you the most joy, the amount you’re spending on family activities might be higher than what you’re spending in other areas such as shopping or self-care. And if health and fitness are the most important parts of your day-to-day, it makes sense for you to spend more money on higher-quality grocery store items or exercise expenses, such as a gym membership or personal training. Your values might also change depending on the stage of life you’re in. Personally, when I lived at home with my parents, I got the most joy out of spending money to travel and dine with friends. Now that I have my own apartment, the purchases that make me happiest are usually centered around home decor and anything aimed at making my space feel more comfortable. It makes sense when you consider that I spend the majority of my day in my apartment and therefore want to improve the place I work, study, eat and relax in — it’s important to me that the things I buy will improve my experience at home. If you want to get clear on what your values are, a good starting point is to think about the kinds of experiences you love, the types of small pleasures you enjoy and the ways you seek to improve your day-to-day life.
2. Track your spending
It can also be helpful to track your progress and make sure you’re actually sticking to the ground rules you set for yourself. The best way to do that is to create a budget or spending plan so you know exactly where your money is going. “Once you have a budget, start tracking your actual spending to see how well you stick to it,” Monell says. “This can be done through a simple spreadsheet or even a notebook. Keep an eye on your progress so you can make changes as needed.” Keeping track also makes it easier for you to notice if you’re still spending too much money in areas that aren’t meaningful to you. That way, you can take steps to reduce or cut those expenses altogether. Select ranked the Mint app as the best free budgeting app since it connects easily to your bank accounts and credit cards and automatically categorizes your transactions for you, though users can also manually modify those categories as needed. YNAB (You Need A Budget) is another solid option for those who want to make sure they’re giving every single dollar a job so you an ensure you’re making the most out of every paycheck.
Mint Learn More Information about Mint has been collected independently by Select and has not been reviewed or provided by Mint prior to publication. Cost Free
Standout features Shows income, expenses, savings goals, credit score, investments, net worth
Categorizes your expenses Yes, but users can modify
Links to accounts Yes, bank and credit cards
Availability Offered in both the App Store (for iOS) and on Google Play (for Android)
Security features Verisign scanning, multi-factor authentication and Touch ID mobile access Terms apply.
You Need a Budget (YNAB) Learn More Information about You Need a Budget (YNAB) has been collected independently by CNBC and has not been reviewed or provided by YNAB prior to publication. Cost 34-day free trial then $84 per year or $11.99 per month (students who provide proof of enrollment get 12 months free)
Standout features Instead of using traditional budgeting buckets, users allocate every dollar they earn to something (known as the “zero-based budgeting system” where no dollar is unaccounted for). Every dollar is assigned a “job,” whether it’s to go toward bills, savings, investments, etc.
Categorizes your expenses No
Links to accounts Yes, bank and credit cards
Availability Offered in both the App Store (for iOS) and on Google Play (for Android)
Security features Encrypted data, accredited data centers, third-party audits and more Terms apply.
3. Allow yourself to be flexible
Whenever you’re making changes to the way you manage your money, remember to give yourself some grace since making sustainable changes takes plenty of patience and practicality. There may be times when you’re tempted to revert back to previous spending habits or you might find yourself in certain social situations where standing your ground is easier said than done. “Remember that your spending should align with your values, but that doesn’t mean it has to be perfect,” Monell says. “If you make a purchase that doesn’t quite fit your budget, don’t beat yourself up over it. Just try to reflect on why you made that decision and if and how you can improve next time. Give yourself permission to be imperfect and commend yourself for striving for improvement.” Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.