Fruclassity Commandment #4: Prepare a Budget for Value Based Spending

The first time I heard the term value based spending was while reading a post written by Shannon over at The Heavy Purse. Shannon has a heart for teaching financial literacy for the masses. It pains her to see people struggling with money when they don’t have to be, and as such, I grabbed onto her to be a mentor like super glue sticks to everything when we first started our journey to pay off debt.

All my life I’d bought things because they made me feel good. I mistakenly thought that “stuff” was the way to happiness, and I was determined to be “happy.”ย 

I grew up a poor kid in a lower middle class section of the city. After my parents’ divorce, our financial situation went from “struggling” to “we’re screwed”. For a girl just entering middle school, this is NOT a good place to be. I was teased regularly for my thrift store clothes and canvas sneakers, and I made the mistake of caring about what others thought.

As such, when I got my first job at 15, I was going to “show them all”. Nearly every dime of the $300 a month I made (mind you, this was 30+ years ago – wages weren’t that high but I worked by tail off ๐Ÿ™‚ )went for name brand clothes. I’d head straight from the bank over to the local County Seat store (anyone remember those?) and fill my bag with capri pants, fluffy Madonna-type short skirts and those cute t-shirts that used to hang off one shoulder. It was the 80’s after all, and I was determined to be a material girl. ๐Ÿ™‚

When the world of grown-upism came, however, and I started to have real-life expenses like rent, gas for the car and a car payment, my frivolous spending ways began to be a burden. I faithfully made my $25 a month minimum payment on my maxed out $300 store credit card, so more people started issuing me credit. I happily accepted their offers and began giving them my business, and my money as I paid them interest every month.

When I started working for a local bank in 1990, I remember they gave us t-shirts to wear on Casual Friday to promote their different credit cards. One t-shirt read “Better living through plastic.” Like many others, I fell hook, line and sinker for this mantra and vowed to have a “better life”, but all I got in return was an increasing debt load.

Then, after our financial epiphany and the realization that we were in way over our heads, I discovered value based spending.

Fruclassity Commandment #4: Prepare a budget for value-based spending. As you manage your money towards debt-freedom and/or financial freedom, spend wisely. Differentiate between โ€œwantsโ€ and โ€œneedsโ€. Which โ€œwantsโ€ can you eliminate? How can you save on some of your โ€œneedsโ€? ย What does value-based spending look like for you? REMEMBER, nobody else needs to approve of your spending values. Make a budget so that you know where every dollar is going. Track your spending to keep yourself accountable and so that you know how to tweak your budget.


Value based spending means you spend the majority of your money on what truly means the most to you. How do you determine what value based spending is for your family?

It Starts with Goals

You start by writing down a list of your financial goals, both short-term and long-term goals. Go ahead, get a piece of paper. I’ll wait. Now, write down what your most important financial goals are, and think BIG.

  • Do you really want that shiny new car as a goal, or is what you really want to have the freedom that comes with financial independence?
  • Do you really want that vacation to Bermuda this year, or would you much rather have the peace of mind knowing that you “owe no man” anything?

It’s up to you: the beauty of value based spending is that there’s no wrong answer. But having that list of goals gives you a catalyst from which to make all other spending decisions in a way that best serves what you truly value. For example:

  • When you get a hankering for ordering pizza instead of cooking at home, you can ask yourself: What’s more important to me – the convenience of not having to cook tonight, or being able to put an extra $20 toward my credit card?
  • When you see that shiny new whatever at the local big box store, you can ask yourself: What’s more important to me – to add a twentieth sweater to my closet or to put an extra $30 in my emergency fund?

Having that catalyst to make decisions with will help you to learn to put your money where it will truly serve you best. Knowing that the answers are yours and yours alone will give you the freedom to do with your money what makes you truly happiest.

People often equate the word “budget” with “restriction” or “prison”. But when you prepare your budget in a way that aligns with your value based spending virtues, you give yourself the freedom to start achieving what you truly want out of life, and the freedom to stop pursuing those things that seem like freedom but are in reality the worst form of bondage: the things that hinder you from achieving what you really want.

And that, my friends, is the key to truly better living. ๐Ÿ™‚


*Photo courtesy of Alexandria K Passe

22 comments on “Fruclassity Commandment #4: Prepare a Budget for Value Based Spending

  1. Wow, you already made $300 a month when you were 15? What was your work before? Right now, I can say that I’m more responsible when it comes to spending. Unlike before, I automatically bought the things that I love without even thinking if I really needed it.

    1. That was working as a waitress. I went to school half days and then went to work for 3-5 hours every day after school. I loved working, I suppose because it gave me money to spend. ๐Ÿ™‚ I hear you on the “automatically buying things.” That was my mantra before my financial revelation, Clarisse! ๐Ÿ™‚

  2. “Better living through plastic”
    Seriously?! I don’t know what it was like when credit cards first came out. Their appearance didn’t impact my spending techniques. But still, that seems crazy! Marketing at its finest – and it obviously worked!!

    1. LOL, I know. ๐Ÿ™‚ Your last line say it perfectly, Jayleen – “We all have different things that are important to us”. This is what makes value based spending such a success.

    1. I think you’re right, DC. Most of the millennials I see are people like you in the blogging world, but I know there’s a whole other mass of them out there that fell for the same lines I did.

  3. That differentiation between wants and needs is exactly where we started. By asking ourselves if we really “needed” something or if we just “wanted” it, we were able to break our habit of just buying on a whim. This helped curb our monthly spending and increase our monthly saving. It was surprising to us how much our monthly credit card bill dropped just by using that simple question.

  4. Great post Laurie! And so true. I admit it’s always, or at least sometimes very hard to make value based decisions. For instance with my iPhone getting killed, I want one SO bad and absolutely hate my cheap replacement. But c’monโ€ฆI’m not going to die and if I have patience a colleague of mine is giving me a free old iPhone 4 which was hardly used. I think I’m always struggling with the “I want it now” factor. Work in progress!

  5. It’s really just been over the course of the last few years that we have gotten a lot better about values-based spending. We used to kind of go through life with really no plan for our money (or ourselves, for that matter!). But now that we have a solid plan for where we would like to be financially, it has helped crystallize our values. We realize that spending money frivolously today will keep us from achieving our goals, which we want very badly to achieve.

    1. Isn’t it wonderful, Dee? So nice to have that “a-ha” moment of clarity when you realize you can choose to spend on things that really are important to you instead of just going through life without a spending plan. Love it!

  6. I really like the concept of value-based spending, and the fact that there’s no right answer. It might give Dave Ramsey a heart attack, but we decided to go away for a family vacation this summer, despite still being in debt. Having a wonderful experience as a family and creating memories is worth taking a little longer to pay off the debt. But you’re so right about remembering to consider the more day-to-day spending choices – $20 for pizza vs. cooking at home – in this way, too. At least for us, those are the ones that really add up!

    1. Amy, it’s SO important to make those value based decisions regardless of what others might think. You and your family alone know the value that the vacation will bring to you, and whether or not it’s worth it to delay total debt freedom to take that vacation. You’re making that decision honestly and responsibly, and that, my friend, is the essence of Fruclassity. ๐Ÿ™‚

  7. “Material Girl”. That was the 80s in a nutshell! It was all about labels on the outside, conspicuous consumption, power suits, credit cards . . . and Madonna. I remember my own frenzied spending too – every time I earned or was given a cent. It was as if I didn’t spend it right away, I’d lose out on . . . I’m not sure what. When you’re used to spending like that, it takes time to figure out your true values so that you really can start value-based budgeting

    1. YES, Ruth – that’s it!! I still drop my jaw at my ignorance of those days. Such short-sighted thinking! But in line with our Fruclassity roots, we forgive ourselves, commit to change and move on. ๐Ÿ™‚

  8. I think value-based spending is a great concept. Too often we spend for the sake of spending…you get that initial high but most times the high wears off and you have to buy something else to attain that high again. If you really think about what is important and what truly brings happiness and spend on those things, it really is much healthier.

    1. Much healthier for your emotions AND for your pocketbook. ๐Ÿ™‚ Thanks, Andrew! We appreciate your comment. ๐Ÿ™‚

  9. This is exactly how I feel about frugality–it doesn’t restrict me, it frees me. For Mr. FW an me, our saving and spending is all in service of our long-term goal of financial independence and a homestead. Once we had that goal to work towards, it became very easy to trim off all unnecessary spending. I love the idea of value-based budgeting and I think it has the power to transform how we think about our money.

    1. Exactly, Mrs. FW! I used to freak out about budgets – felt like I was in prison with them. Then I learned the freedom behind them – how wonderful!

  10. Ahhh Laurie, as you know we are kindred material girl spirits turned fruclassity gals. I had to start working at 14 to pay for the extra things I wanted and because my family didn’t have much, I wanted nice things and it only got worse when I got my investment banking job out of college. I am glad that I have seen the light though and amended my ways, and I don’t miss the labels (I definitely don’t miss the price tags that came with them) as I have evolved.

  11. Thank you so much for your kind words, Laurie! I’m so glad that we connected and honored to have helped you on your journey to financial freedom. My father taught me about value-based spending and I’m so grateful to him for doing so. I see so many people with good intentions tell people “yes” or “no” to the things you can have or desire. And that’s not how life works. It’s up to you figure out what your values and desires are, then work towards them.

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