Let's face it. Spending money is more fun than saving money. Spending money on things you want, when you can afford it, can feel empowering and give you a sense of accomplishment. Conversely, saving money can feel like a chore and can feel limiting. Saving is often equated with having less, or cutting back.
There are ways that you can save money without sacrificing your soul or overall happiness.
Create a Values-Based Budget
Every day you make a choice about what to spend money on. Yes, some of the things you spend money on are needs, like rent and food, but a lot of it is wants as well.
In order to save money without feeling like you are giving up everything and sacrificing your soul, you need to create a values-based budget.
A values-based budget focuses on the things that provide value in your life and cuts out the things that don't serve you.
Start by looking at your expenses, and categorize each one as a want or need. Then, start looking at everything in the want category. Does everything in the want category align with your values? Or is it mindless spending, while going through the motions?
Oftentimes we may think we spend money on our values — but if you want to know your values in reality, look at where you are spending your money. For example, if you value books, but choose to spend money on video games instead, your budget and your values are misaligned.
To reconcile your values and your spending, create a list of things that you really value — things that truly make you happy, that bring value to your life and your relationships, and make your life easier.
Once you have created a list with your values, make room in your budget for them and ruthlessly cut out other items that are unnecessary. For example, my priorities are getting out of debt and traveling. Because of these big priorities, I choose to live a minimal life. I live in a studio apartment with my partner, don't have a car, don't have a TV, nor any pets. Would I enjoy some of the things I choose to live without? Sure. Would they make my life more convenient? Sometimes. But I don't need them and they don't offer the same value as getting out of debt and traveling do.
An exercise that helps me stay focused on spending on my values, is realizing that spending money is a political act. Every time you spend money, you are supporting something or someone. Who or what do you want to support? This exercise helps me be more intentional with my spending and support the things I love in my life.
Saving money can feel like work, but a great way to free up any brain power is to automate everything. I am a huge proponent of automating your savings. Before moving to New York for graduate school, I saved $14,000 using the power of automation.
Each paycheck, I would automatically contribute $600 to my savings account. Because it was automatic, I didn't even have time to miss it. Saving money, like anything else you want to master in life, requires persistence and positive habits. For me, automating my savings ensures that I am sticking to my goals and putting myself first.
As my old acting teacher would say, “there are a million reasons not to do something, but you just need one good reason to get started.” I believe what she was saying is that excuses are everywhere. They are the poison of productivity and will sway your thinking. With automation you are taking yourself out of the equation, so you can save money where it counts, and spend time on the things that really matter.
Make Saving Money Like a Game
Imagine you are playing a game and the goal is to save as much money as possible, but still buy the things that you want. This is a real game I like to play any time I spend money. When I think about it this way, and know what I'd do with the money saved (pay off debt + travel), I am motivated to look for deals.
If you are doing any shopping, look for coupon codes and other money saving deals on sites like RetailMeNot first. If you are wanting to go out for dinner on the town, save some money and use Groupon. If you still want to enjoy nice luxuries like a massage, or pedicure, go to a beauty school.
I've gone to beauty schools several times and have always enjoyed their services. The services require a bit more time, but it's worth the savings for me. I have gotten a pedicure, haircut and facial for around $30, which is hardly the price for one of those services at a professional salon.
The Bottom Line
When you know your values, it's easy to find ways to save money elsewhere, so you can spend it where you really want. Think of saving money like playing a game and ask yourself, “Can I get this cheaper? How?”
In short, saving money doesn't have to be a daunting task that you “know you should do”, but haven't gotten to yet. Forget about mindless spending and invest in relationships and hobbies — things that are everlasting and will offer value for years to come — not momentary blips of happiness.
Saving money so that you can spend money where it matters, hardly feels like saving. It's a simple mind shift that focuses on appreciating what you have, and spending on your values.
Do you have any savings hacks to help spend on your values?
This post was originally published on December 25, 2014 and updated on April 7, 2020.