How To Change Your Spending Habits

New Idea

I have been reading a book this week that has changed my perspective just a little bit on money and how I spend it.  The author of the book states: “If I have a book and you have $20, and we mutually decide to exchange my book for your $20, what were the book and the $20 worth to you?  What were the book and the $20 worth to me?  Most people answer that the book was worth $20 to you and me.  This is wrong.  We only give up something in an exchange when we value what we’re receiving more than we value what we’re giving up.  Hence, there is no way to quantify an exact amount that the book or the $20 was worth to you or me.  All we can conclusively say is that to you, the book was worth more than $20 and the $20 was worth less than the book; to me the book was worth less than $20 and the $20 was worth more than the book.  We both walk away wealthier than before the transaction because we both have something that is worth more to us than what we had before.”  (Killing Sacred Cows, by Garrett B. Gunderson, page 14).

Money, in itself, doesn’t have value.  We are the ones who give it value.  “We only exchange when others have something that we value more than what we currently have.”  Value is not in the money, or in the things, it is in the people.  People have intrinsic value, not things.  People make “individual, personal determinations of the value of material things.”

Shifted Thinking

This sparked some thoughts in my mind about my relationship with money.  Do I really value what I am exchanging money for, more than the money itself?  Does what I am spending money on reflect my value system, and my goals?  Does what I am exchanging my money for provide more value to me than something else I could be receiving instead (opportunity cost)?  In the book example above, I may feel that the book is worth far more than $20 for whatever reason.  Maybe I feel the knowledge I will gain from the book is invaluable, maybe the personal enjoyment of reading is ‘worth’ more than $20.  Maybe what I learn from the book will help me earn more than $20.  However, to you, the book may not be worth even $5.  Maybe it is a boring topic for you.  Maybe you don’t enjoy reading.  Maybe it is knowledge you already have.  For you, giving $20 in exchange for the book would not be a valuable transaction, nor would it reflect your value system.

Self evaluation

I want to be sure that the money I exchange is exchanged for things that I value.  Personally, I have found that I value experiences, memories, and skills over material items.  That is why I exchange money for things like horseback riding lessons, dance lessons, memberships, and activities, instead of toys, clothes, and dining out.  This isn’t good or bad, but simply a reflection of my value system.  Does your spending reflect your values and your goals?  Maybe what you think are your values, and what really are your values are different.  You can learn a whole lot about a person by what they choose to spend their money on.  As you track your expenses, and look at your spending patterns and habits, you will be able to clearly see what you value.  And, if your money is not being exchanged for things that you value, it is time to evaluate why, and make changes.  If you don’t like what you see, try ‘practicing’ exchanging your money for things that you really do value, and pass on the things that really aren’t important to you.  See what happens.  See how you feel.

 

Exchange vs. Spend

The material things we have, including money, has been given to us by our Heavenly Father.  We have an abundance of comfort, and safety, and freedom.  One way to show gratitude for what we have been given is to use these blessings to bring more value into our lives, and into the lives of others.  I love the word ‘exchange’ instead of ‘spend.’  When I think of the action of spending, it feels like loss and scarcity.  It feels like my money is being taken away and is gone forever.  The word exchange feels like a mutual decision.  It feels like an agreeable choice, that both parties are happy with.  It feels like abundance.  Once again, “We both walk away wealthier than before the transaction because we both have something that is worth more to us than what we had before.”

I am happy to exchange some of my means to the power company so that I can enjoy heat and light.  I am glad to exchange money for fuel to put in my car so we can go fun places to learn new things.  When I use the word exchange, it helps me think twice about what I am exchanging for.  Is this exchange really something that is valuable to me?  It helps me realize that what I do with my money and means really is my choice, that I am acting on it, and not being acted upon by outside forces.

Making changes with my new knowledge

This new paradigm about money, and new way of thinking about what I do with it, has helped me rethink my spending (my exchanging, if you will) and my values and goals, and if they are in alignment.  I find myself stopping an exchange when I realize I am just participating because I am bored or sad, or because someone else already has it (competition, jealousy), or to impress someone (vanity), etc., but it really isn’t something that I value.

It applies to our relationships, too

I think a lot of money conflicts in relationships can be traced back to this idea of value. Spending money isn’t the issue, it’s that one partner values what the money was exchanged for, and the other doesn’t.  This is yet another reason why communicating about your values and goals as individuals, as well as a family unit, can help alleviate some confusion and misunderstanding.  If I know my husband values something, and he would like to exchange money to obtain it, I am better able to understand why he feels it is a worthwhile exchange, even I don’t feel the same way.

 

 

What do you think?

This small paradigm shift has opened up a new way of thinking about what I do with my money and where I let it go.  It has also helped me to rethink my exchanges to be sure they are really bringing me value, and closer to my goals.

 

I’d love to hear what you think about this idea.  Leave me a comment, and let me know!

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