Your 'Why' is the Only Budget You Need

Exploring the Impact of Aligning Financial Decisions with Your Personal Values

Investments. Savings. Credit Cards. Student Loans. Car Payments. Retirement Planning. Cash.

Let’s face it, whether you have a job right now or not money is probably on your mind. Some of you may even be considering making a New Years Resolution to get a better handle on your money this year. But before you download that new budgeting app or sign up to attend a financial planning workshop, take a moment and ask yourself “What does my relationship with my money look like?”

I’ll be honest with you. For years my relationship with money was like a kid who believed there was a monster who lived in his bedroom closet. If I didn’t look over there, it couldn’t hurt me.

It took me years to learn just how wrong I was. There wasn’t some monster living in the dark. In fact, I was keeping myself in the dark by refusing to engage with my finances. I didn’t realize it at the time but that fear and ignorance actually meant that money was in control of my decisions, not me.

It wasn’t until about 10 years ago that I got the courage to redefine my relationship with my finances. It’s been a long road, but I soon found that I had a real passion for personal finance. In 2023, I got certified as a financial educator and started getting involved in the financial planning community. Over the years, I’ve built relationships with a lot of great folks in that space.

Today’s guest post is from Rochelle Coleman, a financial coach with a background in the social impact sector who I met at FormerGov’s coworking sessions at Eaton House in the fall. If you’re looking for real, grounded advice on redefining your relationship with your money, keep reading!

Have a question for a financial coach? RSVP now for our Ask Me Anything with Rochelle on Tuesday January 13 at 12pm EST.

Hi. I’m Rochelle, and I’ve got a question for you. What kind of mindset do you have when it comes to managing your finances?

When you receive money, do you think, “I will keep X amount and the rest is available for spending,” or do you spend first and save whatever is left? How is that approach working for you? Are you saving enough? Is most of your money pointed towards the past, present, or the future?

As a financial coach, I work with clients to help them manage their money in a way that allows them to live their desired life and take care of their future selves. While numbers and math are certainly involved, I believe the real wins come from asking the right questions and finding the answers. Questions like: What is enough? Is this purchase worth it?

Money, though a single word, carries a lot of emotional baggage. This baggage includes feelings of shame, hope, dreams, and fear, among others. However, we cannot shy away from money because, if we don’t understand how to use it as a tool, it can take control of our lives.

Instead of feeling out of control, we need to learn to manage money effectively so that it serves our needs, helps us achieve our goals, and supports both our present and future selves. There are effective tools available to enhance our money mindset, empowering us to stay focused on our goals and craft the life we aspire to live.

Focus on the Why

When the purpose or “why” behind our actions is missing, it’s easy to feel aimless. While there’s nothing wrong with going with the flow, if you feel like your finances are controlling your life rather than the other way around, understanding your “why” becomes even more crucial.

When I first meet with clients, I share a self-reflection sheet that encourages them to consider their core values, the key things that bring them happiness on a weekly basis, and their short-term and long-term goals. These goals are important milestones that you’d like to achieve. However, understanding your values—your belief system and the daily joys you experience—is what keeps you motivated day to day.

Interestingly, I have found that when people complete this exercise, most of the things that bring them happiness come at little or no cost. Enjoying time with friends and family, reading a book, spending time in nature, or hearing a child’s laughter—these life moments are often rich in meaning but low in cost.

Now not everything that brings us joy is free, but it’s vital to remember that you can have good times by keeping things simple, especially while pursuing financial goals. Whether you’re keeping expenses low while searching for new employment, saving for a car or home, or paying down debt, it’s easy to feel deprived.

During these times, it’s important to lean on your values and the things that bring you joy. Your goals, both short-term and long-term, help you stay focused. Are your spending habits aligned with your values? Are they helping you achieve your financial goals? This alignment allows you to create a clear path for managing your income and expenses.

Zac’s Story: Bye Bye DoorDash, Hello Homeownership

Understanding your “why” unlocks your ability to notice opportunities to creatively manage your finances. Having a north star to guide your decision-making gives you the awareness you need to make confident choices. Zac’s story is a good example.

When I met him Zac was in his mid-thirties and homeownership was on his mind. He really wanted to buy a house in the next five years but hadn’t been able to make any real progress towards this goal.

After combing through his finances it became clear that all of his spending was focused on immediate needs rather than saving for the future. While he wanted to own a home in the future, he hadn’t taken any clear actions to get there. He didn’t even have a separate savings account set up where he could put aside money for that purpose.

Zac came away from our deep dive into his expenses in a state of shock. He had no idea how much he was actually spending, especially when it came to food. Ends up, Zac was spending over $1,000 a month on eating out, particularly on food delivery services like Uber Eats and DoorDash.

Looking deeper he realized that a significant portion of those costs came from admin fees, delivery fees, and service fees and then there were the tips for the drivers. Sure, the convenience was nice but looking at the high cost made him start questioning its overall value.

To address this, we implemented a new rule: he would cook more meals at home and, when he did order food, he would go pick it up to avoid the additional fees. He would also set up a savings account dedicated to his house buying funds.

Zac came to our next meeting with a big smile on his face. He had cut his going-out expenses to just $50 that month and added $950 to his house fund. As the months went by, Zac continued to follow this new rule, occasionally spending up to $200 a month on dining out but never exceeding $1,000.

With each deposit into his new savings account, Zac felt his dream of homeownership become more real. True he wasn’t at the point where he was looking for a relator, but Zac saw how small, steady progress would get him there.

Changing how he thought about his food intake and saving for housing helped him align with other values. Zac started a small garden on his patio. After some trial and error, he found success in growing tomatoes, red & green peppers, and jalapenos. This not only added more fresh food to his diet but also provided him with space to learn and challenge himself. It aligned nicely with his desire for independence and to be self-sufficient.

While our early conversations focused on reducing Zac’s eating out expenses, we eventually expanded our work into other parts of his financial life. By the time we finished working together, he had established a six-month emergency fund, was on track with his housing fund, and had improved how he managed his retirement accounts. He also cut down on spending in areas that weren’t aligned with his values.

During our initial conversations, Zac was worried that by cutting spending in certain areas he would feel like he was missing out and that life wouldn’t be as enjoyable. At the end of everything, he discovered that the opposite was true.

By aligning his spending with his “why”, Zac cleared away more room for the things he enjoyed by heavily reducing (or eliminating) spending in areas that didn’t serve his values. Aligning his income and expenses with how he wanted to live made him more efficient and effective in achieving his financial goals.

Taking Your First Steps to Financial Empowerment

In working with Rochelle, Zac realized that he didn’t need to break out complex excel formulas or make drastic sacrifices in his life to build the life he envisioned; all he needed was to investigate his values and analyze his spending against those. By prioritizing what truly mattered in his life, Zac cleared away spending that was only distracting him from his goals.

This week, we want you to take a few concrete steps toward redesigning the relationship between your values and your money. Remember: you don’t need to start with a budget, or even numbers. It’s your why that matters here.

First, we’re asking you to carve out sometime (30 mins might be enough) to explore the first two sections of Rochelle’s self-reflection sheet, which focus on examining your core values and the things that bring you low-cost joy.

Next, we’d love it if you would join us on Tuesday Jan 13th at 12pm EST for a discussion with Rochelle where she’ll dive more into what it takes to redefine your money mindset.

Rochelle Coleman runs Second Stage Finance and is an AFC certified financial coach who focuses on helping her clients align their income and spending with their values and goals. If you are in the DC area, you can find her at Eaton House on Tuesdays where she helps folks from our community during FormerGov’s free coworking days.