What do personal value systems have to do with a frugal life? Everything! Your value system is the key to what you should spend money and time on, and where you can skimp without lowering your quality of life. When you make a budget, list your needs before your wants. Basic needs include shelter, food, potable water and water for hygiene, a bathroom, a way to do laundry, a small amount of clothing (enough to be cover your body and stay warm in cold weather), some kind of phone/internet connection, some form of transportation, education for the children, medical care, and some kind of entertainment.
Take your total income at this moment and assign a figure to each need. You may not have anything left when you are done adding, or worse yet, you may not even have all your basic needs met. This is true for many in this economy. If this is true for you, don’t despair. That won’t help. Try instead to get the uncovered needs met in some way that doesn’t involve money. Try barter or the gift economy.
But, if you are one of the lucky people with a surplus, you also have a potential spending problem. Unless you are very wealthy (and perhaps even then) you can’t buy everything on your list of wants at the same time. The process of values clarification will act as a beacon for your spending priorities. In the meantime, put the surplus away. You need to think and plan before you spend.
Many values clarification systems rely on a list of possible values and then ask you to pick the top three or five or maybe even ten. This is worthwhile to a point, but to practice values- based frugality you need to go deeper, and then you need to be very precise. The precision is a tool to help you translate a value, which is an idea, quality, or feeling, into a spending decision. When you spend you have to spend on a specific item, service, or experience.
Here is how it works—you discover that beauty is a quality you value deeply. Does that translate into buying a painting for your wall, or a trip to a beautiful place, or to getting your hair and nails done? What does beauty actually mean to you?
Or if you say you value the arts, which ones? Do you mean music, theater, or graphic arts? What is it that attracts you? Because you can’t buy “the arts”, but you can buy tickets to a concert or download some new tunes. Or, when you dive deep, you may find that it is actually creativity that you value. In that case, what medium do you want to use? That will guide you in your spending. As long as you don’t know what you really want, don’t make any big spending decisions.
Once you have done all the homework and know what you truly value you can start shopping. A frugal shopper always tries to get the best value for their money, but this does not mean buying the cheapest thing. It means buying the best tool for the job at the best available price. For example, if you have creativity as a high value and your medium is photography, it makes sense to buy a good camera even if it seems “expensive”. When you are spending in alignment with your personal values system, expense is a relative term. This is principle is not carte blanche permission to dump the whole budgeting process. If the photographer in the example buys an expensive camera and lenses, they may have to dial down the clothes expense or some other area that is not so important to them. That is why self-knowledge is so important to frugality.
One of the most common questions I am asked is about whether it is “OK” to go to out for coffee every day. The coffee habit is one often fixed upon by financial pundits as a budget buster. To discover the answer for yourself, look at your values. And then ask yourself WHY you are buying your coffee out. Do you buy a fancy expensive concoction to go and drink it while speeding down the freeway barely tasting it? Then it is likely a big waste. Make your own and use a commuter cup. But, if you are meeting you two best friends once a week and enjoying every sip, go ahead and get the jumbo chocalata supreme. It’s actually about friendship and connection. And that is a perfectly valid expense.
Here is some links for books about values clarification:
Remember to try your library first, unless owning a lot of books is a high value for you!