Find Freedom With Intentional Spending
In a few short months, I’ll be embarking on a new journey that has been a decade in the making: I’m doing a fellowship in palliative care. One of the things that drew me to palliative care (and coaching) is the intentionality that’s involved in planning for the future. I’m particularly drawn to the concept of tradeoffs that we use in discussions about goals of care. An example of a tradeoff when discussing treatment options with a patient with cancer might be, “what would you be willing to go through for the chance of living another month?” Meaning, would you be willing to endure more suffering through radiation, chemo, or procedures if that meant you might live longer? If you think about it, life itself is a series of tradeoffs. Each decision we make to do one thing is a decision not to do another.
As someone who’s about to take a pay cut to go back to being a trainee, the idea of tradeoffs is surfacing again for me regarding financial planning. I’ll be honest: on the spender to saver spectrum, I’m pretty comfortably on the saver side. Living below my means allows me the freedom to go back for additional training without worrying about the financial impact, but being a saver isn’t without drawbacks. For me, my historical lack of financial freedom was through the spending restrictions I placed on myself, while someone who overspends has a lack of freedom because of living paycheck to paycheck (yes, doctors do this too!). The idea of tradeoffs was what helped me learn to spend on experiences that I value; I realized that spending a lot of money on some things didn’t mean I had to spend a lot of money on everything. This is the difference between intentional spending and lifestyle inflation - in the former you spend money on what you’ve decided adds value to your life, while the latter is more about spending for the sake of spending or keeping up with others. Whether you naturally tend to save or spend, this article will help you evaluate your priorities and take control over the expenditure of your energy.
Know Your Values
A good place to start with any discussion of intentions is first knowing your values. What are the people, things, or principles in life that are the most important to you? Some examples of values that have come up in coaching conversations include: family, service, community, adventure/ travel, security, autonomy, creativity, and generosity. If you don’t already have a list of values, I recommend using a values sort tool like this one. Don’t overthink this exercise - go with your gut and recognize that the ones you choose to focus on now aren’t set in stone and may change over time. If you have a partner or a close friend or family member, feel free to invite them into the conversation if you’re not sure where to start. It may be easier for others to see what we value if it’s not something we’ve spent time thinking about before. Jot down around five values as a springboard for this exercise, and feel free to go back and revise as you move along.
Know Where Your Money Goes
According to a quote attributed to Maya Angelou, “you can’t really know where you’re going until you know where you have been.” I’m pretty sure she wasn’t talking about finances, but I think it applies just the same. Even if you’re staunchly against budgeting, there’s no reason you can’t take an inventory of your spending. My preferred method is a good, old-fashioned Excel spreadsheet where I input each expense into pre-defined broad categories of housing, transportation, food, saving, donations, fun, and health (it gets much more granular, but I’ll spare you that level of detail). Since the passing of the beloved app Mint, I’ve used Credit Karma’s transaction tracking feature to consolidate my accounts and expenses in one place. While manually tracking expenses may not be your cup of tea, I use the opportunity to think about whether each expense adds value. If you prefer a more automated snapshot, there are plenty of apps that can simplify this process for you. Start by analyzing just last month’s spending and see what insights you gain.
Make Intentional Decisions
Now bring your values and expenses all into the same frame. Could you guess your list of values from looking at where your money is going? Or is there a disconnect between what’s important to you and what you’re spending money on? The beauty of values and spending is that there truly is no right or wrong - it’s all about what makes sense to you. Going back to the idea of tradeoffs, choosing to spend $300 on clothes each month might mean you don’t have as much money to travel as you’d like. Or going out to eat at restaurants with friends may not be worth the expense when you’d prefer to host a potluck at home and save that extra money to take some time off before you start your next job. Take this opportunity to write down just one aspect of your life you want to feel free to spend on and one other aspect where you’d like to decrease spending because the tradeoff isn’t worth it.
Money is a major source of stress for many individuals and relationships, but it can also be a means of enjoyment, connection, adventure, security, and service. Regardless of whether it’s easier for you to save or spend, spending money according to your values can provide a feeling of abundance and freedom. Start by connecting with what’s important to you, evaluate what’s being prioritized with your current spending, and choose which elements of your spending you want to dial up or down to create the life that feels most aligned. Use the concept of tradeoffs to help you hone in on what you value most and watch as your life transforms into a reflection of who you are.
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