Why Did You Buy That? Align Your Money and Your Values.

I recently watched a documentary called "Minimalism: A Documentary About the Important Things." It is a fascinating look at consumption today. It talks about a lot of different things, but it really focuses on our desire for more and more stuff. I recommend watching it if you like documentaries and are interested in learning about our endless desire for stuff.

As I watched the film, I was constantly reminded of two books by author Carl Richards, commonly referred to as The Sketch Guy. He wrote The Behavior Gap and The One-Page Financial Plan. Both of his books and his weekly articles on the New York Times often cover the same topics. The Behavior Gap talks mostly about how we make emotional decisions with our money and The One-Page Financial Plan talks about how to make better decisions with your money, despite your emotions.

Spending Is OK!

The Minimalism documentary, even though they highlight folks who have moved into tiny houses, started wearing only a few articles of clothing, or became homeless travelers of the world, it's really about trying to get us to focus on our spending, and warning us that spending more money won't make us any happier. Consumption is fine. Compulsive consumption and consumption to find happiness isn't.

Aligning Spending and Values

In his books, Mr. Richards often talks about aligning your values and your money. Here are a couple of examples he gives.

• One couple discovered they spent a lot of money on outdoor recreation, and at first they didn't like learning that. After talking about it, though, they really value time outdoors with their family so it was fine.

• Another couple was trying to save for a house but realized they spend an enormous amount of money on dining out. Feeling embarrassed they talked to their financial planner about it and learned that since they both had jobs in the food industry, they really valued restaurant experiences. They also learned that they didn't value having a house, so they could spend that money on other things they valued, including dining out with friends.

Be Careful

Now, it's not just about saying you value something and then spending all your money on that. Another example is a woman who spent $100 every weekend having lunches with her friends. It turns out she really values time with friends so it seems on the surface that it would be okay. But after talking with her advisor, they discussed ways to enjoy time with her friends for less than $5,200 per year.

Everyone Is Different

My wife and I value outdoor travel and adventures. As such a lot of our money is spend on hiking and camping trips. We don't value eating out at restaurants as much, living in a giant house, or driving luxury cars. So it makes sense for us to not spend our money on those things. Some people do value those things, so it's okay to spend the money. The only caveat is that is has to be within your means.

What Do Millionaires Buy?

One final book recommendation is The Millionaire Next Door, by Thomas Stanley and William Danko. This book talks about reckless spending by looking at people who don't spend recklessly; namely, millionaires. It turns out that many of those that are truly wealthy don't have a lot of material things. Of course, there are some that do but celebrities, even though they have expensive things, are actually living below their means.

Final Note

Take some time to determine what you truly value. When you do this, try and determine why it is that you value what you do. If you value driving foreign cards, try to find out if you like how they perform and if so, are there less expensive vehicles that perform similarly? Maybe the core reason is that you want people to recognize you, and if so, find ways to be noticed in less expensive ways. Perhaps it's all of the above and you can't get that with anything but expensive, foreign cars. Give yourself permission to spend money on things you value. And lastly, try to eliminate spending too much money on things that you don't value. But please make sure you aren't sacrificing other values.