Values-Based Budgeting: An Alternative Approach

Traditional budgeting methods often prioritise numbers over values, which can leave individuals feeling disconnected from their true financial aspirations.  Values-based budgeting, on the other hand, empowers individuals to align their discretionary spending with their core values and priorities. In this article, we’ll explore what values-based budgeting is, how to implement it, and the benefits it can bring to your financial life.


Values-based budgeting, also known as conscious spending or mindful budgeting, is a financial strategy that allows individuals to connect their financial decisions with their deepest values and passions, which is especially important in a time of rising costs that reduce funds available to allocate towards discretionary spending. 

Rather than the immediate focus being on what to cut out (i.e. a ‘negative screen’), it is instead about understanding the things that are important to you and which make you feel good (i.e. a ‘positive screen’) to allow you to redirect your spending towards them. 


Values-based budgeting provides many benefits, including:

  1. Increased Fulfillment: Values-based budgeting brings a sense of fulfillment.  By directing your financial resources toward what truly matters, you’ll experience a greater sense of purpose and happiness.
  2. Reduced Stress: Unlike traditional budgeting, values-based budgeting provides flexibility and reduces guilt associated with occasional indulgences.  This can be especially comforting when essential expenses are on the rise.
  3. Alignment with Goals: When your spending aligns with your values, you’re more likely to achieve long-term financial goals, whether it’s saving for a home, funding education, travelling to a new country or supporting other family members amidst increasing living costs.
  4. Better Decision Making: Knowing your values simplifies decision-making, especially when facing rising costs.  You can quickly evaluate whether a purchase aligns with your values and is worth the outlay.
  5. Enhanced Financial Well-Being: Over time, values-based budgeting leads to improved financial health. You’ll save more, reduce debt, and build wealth while navigating the challenges of increasing fixed costs of living.


There are several steps involved in implementing a values-based budgeting approach to your personal finances:

  1. Identify Your Values: Start by identifying your core values, which may include things like family, education, financial security, health, travel, community involvement, environment, or personal growth.  Take time to self-reflect and write down a list of what truly matters to you.
  2. Create a Values-Based Budget: Allocate a portion of your discretionary income to each value using budgeting tools or spreadsheets.  This ensures your spending reflects what matters most to you.
  3. Track Your Spending: Regularly monitor expenses to ensure they align with your values and address the increasing costs.  Use budgeting apps to categorise spending effectively.
  4. Adjust as Needed: Be prepared to adjust your budget as your values and priorities evolve, and as the cost of living continues to change.
  5. Be Mindful: Cultivate mindfulness in spending decisions. In a world of rising costs, ask if a purchase aligns with your values and is a wise expenditure given what is important to you.


Values-based budgeting is about creating a spending plan that resonates with your key aspirations and values. It can lead to better financial outcomes, a sense of contentment, and purpose in your financial journey.

If you would like assistance with implementing a values-based budget, contact our office to arrange a time to meet with your adviser to discuss this further.