I used to spend thousands of dollars on my hair, now I get my hair cut for free. My hair, keeping it blonde and keeping up with appearances like that, do not align with my core values. I'm here today to talk to you all about how to figure out what your core values are and start spending your money in a way that aligns with your values.
If you don't already follow me on Instagram, go follow me on Instagram, but I went on a rant about people who judge people on FIRE others and think, wow they are cheap or frugal. In reality, people who find FIRE are just good at knowing what they find value in and what they are excited to spend money on. Instead of spending mindlessly, we're here today to not shame anybody on spending their hard earned money, as long as it aligns with their core values.
This exercise will really help you figure out why you are trying to reach financial independence. It will align all of your values and everything really you do in life towards those things you want to achieve. Let’s talk money, honey!
FIRE gets a pretty bad rap for it’s followers being too frugal, being extreme, living like Scrooge McDuck and counting all their pennies. When you hear about people’s FIRE stories many hear how they live and think they are not really enjoying life. I am here to dispel that notion.
There is a modern day FIRE movement with normal human beings like you and me who are pursuing FIRE. We do not skimp out on eating omakase or grabbing brunch with their friends and still working on becoming financially independent, possibly retiring early.
Whether you are planning on retiring early or just starting your journey into personal finance, before you even begin any of that, you need to align on your values. What do I mean by that? I mean what are the things that drive you as a human?
For example, my five core values are: creativity, community, happiness, safety, and contentment. Those are my five core values. Everything I do and everything I spend on are all about those principles. I wanted to walk you through exactly how I go about determining what are the values behind my spending.
Since I was on this rant on my Instagram, I decided to go ahead and redo this exercise on my core values. They remain pretty much similar to what they were when I was first finding financial independence and the FIRE movement. Unfortunately, it was on a scrap of paper and it was cast aside. So yes, I decided to do it again and make it official.
1. Write down values that resonate with you
Google a list of values to jump start your brainstorm. Here’s one that I used, but any website is good. Any word that jumped out at me, I wrote down. Writing down words that resonate with you right away and speak to your soul is a good starting point. I initially tended to gravitate towards words that are more scholarly and dismiss cheesy things like “love.”
2. Think of memorable moments in your life
Write down all of the experiences that stood out in your mind over the course of your life—good and bad. I wrote down blurbs about moments that shaped me. Then, I would go in and underline all of the value-based words in that experience.
For example, I wrote:
Being in love completely trusting my last partner
Love got underlined (even though I initially dismissed it). Trust got underlined. Another example:
Feeling safe being with Mom and Dad, comfort knowing all of my needs will be met
Safe was underlined. And then I thought of times where I was really, really mad:
My friend was disloyal and betrayed my trust when she started dating a guy she knew I liked
I underlined disloyal and trust. (I added the word loyalty to my list.) Hopefully these examples give you an idea about experiences that can be formative to you and stand out in your life. What are your experiences?
3. Write down things that fuel you
Moving beyond experiences, what are the things that you find fulfillment in? For me, I wrote:
Being creative through self-expression, finding a sense of wonder in the beauty of the world and my surroundings, and inspiring and connecting with other people
Those are 3 things that fuel me on my daily basis that maybe didn't relate to any of my experiences or the words that I had highlighted in the initial word dump.
4. Group similar words into themes
Now that you've done all of that, you'll have a bunch of words and values. For me, it came out to ~25 words, some of them being very closely related, almost interchangeable with slightly nuanced differences. I organized my approximately 25 words into little bubbles. Here are two examples:
Community, family, friendship, intimacy, service, connection, love
Creativity, aesthetics, beauty, self-expression
Some of the words are very similar and grouping them together really helps you define which core values are speaking to you.
5. Form value statements
From there you can write a value statement. For my community bubble I put:
Community being of service and building intimate connections with friends, family, and those I love.
That encompasses all of the words that I had written down. It's more of a value statement. All of these values encompass what I'm doing with my life and the things that bring me joy and give me purpose. It is WHY I am building a FIRE community of like-minded young millennials working to become financially independent.
Recognizing that this is a value, helps me understand it is a priority for me to spend money on building community. I'm willing to spend money for my website and things like that to grow and foster these relationships in my life.
Once you organize your bubbles you will create value statements. Value statements give a bigger, more whole picture to your singular words. One word is a word and there's much more depth to them that can't be captured in a singular word. These statements help establish your intentions and align all of your values.
Focus on your Focus
This is a really valuable exercise before you even begin your financial independence journey. If you're in debt, if you have a problem with spending, aligning your values and understanding why you're spending on what you’re spending on helps you recognize when you are spending mindlessly. If your spending doesn't align with your values, then you can cut it out because it clearly is not a priority in your life.
That is where many people have take issue with the FIRE movement. People look at another person's spending habits and are like they are way too stingy! I think it’s important to focus on yourself. I don’t mean to say be selfish, but you can only focus on changing what you do and what you spend on.
It's unimportant to you how other people spend. If others want to keep up with the Joneses, buy nice cars, live above their means, that's their prerogative. At the end of the day you can't change them, nor should you. Focus on yourself and change what you do. You can only impact your life because you have control over that.
How my Spending Has CHanged
Let's take a look back at my mindless spending and how that's how that's changed now that I've aligned all of my values. One of my values is creativity. For me creativity is self-expression, finding beauty, and surrounding myself with beautiful things. That's not a bad thing at all, but another one of my values is contentment and being okay with enough. I try to seek out and know when I am satisfied. I'm definitely a satisfier, not a maximizer. That's my nature—being efficient and knowing when enough is enough.
I was spending thousands of dollars on my appearances from my hair to my nails to the clothes that I was wearing. I would spend a ton of money. Looking at my values, I was able to see it wasn't an efficient use of my money and not making me feel exorbitantly more beautiful.
Now when I shop, I rarely pay full price for clothes. I try to look at things that are secondhand. They deliver on the most efficient value and leave me with a sense of satisfaction knowing that I look and feel fashionable. And yes, I also still wear makeup. It gives me confidence and makes me feel pretty. However, the $3 eyeshadow that I'm currently wearing looks great (at least I think so personally, whatever if you think differently). I used to spend like $80 on an eyeshadow palette easily. Did that make me insanely more beautiful or feel more confident? No. My values of being efficient and finding satisfaction in life and my creativity and self-expression are now in alignment.
As another example, I'm a basic girl. I like drinking Alfred's Coffee and Cha Cha Matcha and spending money on bougie foods. Do I do it every day? No. If my friend wants to meet up, of course! I value community. I value friendship. I value sharing an experience with them. I don’t even blink when it comes to spending money on those experiences. Catching up with my friends over cocktails is really expensive but I love a yummy craft cocktail and I love my friends all of those align to bring me a sense of value and happiness.
Find your core values!
That is how I think about spending money. If you are on your own journey to financial independence and want to retire early or at least bare minimum, be financially independent, I really encourage you to do this exercise. Think about value-based spending. What values align with your life and then spend as much as you want on things that align with those values. If it doesn't, really be mindful and think hard about why you are spending what you are spending.
Being more intentional with spending will really truly set you up for success. At the end of the day, you will look at your FIRE journey and know that you are working on building a life that encompasses all of your values. This really allows me to live a very purpose-driven life. Be intentional and align your values with your spending.
If you like this video and found value out of value-spending, be sure to click the button below and subscribe to my Youtube channel. That way more people have the opportunity to watch the video and really think about what they're spending money on. This is truly the first step to getting better with money!
Let's retire early together!
