You're spending at least 20% of your monthly income on things that don't matter to you.

Kind of presumptive for me to say, right? But after analyzing mine and Hanna's budget (too many times to count) and coaching hundreds of clients, I can tell you this was true for us and the vast majority of people I work with.

And you're probably not that different.

It reminds me of a study many people know from Mike Michalowicz's book, Clockwork. The basic gist is that without guiding landmarks, people attempting to walk in a straight line will actually end up walking in circles.

We operate from instinctual thinking that makes us want to stay safe, stick to the things we know, and blend in with the herd. We walk in familiar circles, instead of venturing out on a linear path into the unknown.

Your finances are no exception.

Most of us subconsciously shop at the same stores, eat at the same restaurants, upgrade our phones on the same timelines, decide which cars we do and don't like... all based on what we're used to and what we see the people around us doing.

Unless you have guiding landmarks to make your financial decisions conscious - you'll continue walking in the same circles, spending a significant portion of your income on stuff you don't actually care about.

So how do you establish guiding financial landmarks?

Values Based Budgeting

Before you can stop circular spending patterns and start using your money in meaningful ways, you have to figure out what you think is meaningful. You have to spend time identifying your values.

Here's a list of values people commonly spend on:

• Comfort
• Convenience
• Confidence
• Entertainment
• Love
• Feeling valuable
• Impressing others
• New experiences / Novelty
• Nostalgia
• Relaxation
• Sense of belonging
• Sense of duty
• Sense of honor
• Showing love
• Therapeutic
• Thrill / adrenaline rush
• Time savings
• Time alone
• Time with others/ relationships

Let's take eating out for example. Three people could eat at the same restaurant and spend the exact same amount, but achieve a very different value from their spending.

• Person 1 is meeting friends for dinner. They're spending money on relationships.
• Person 2 doesn't want to cook or do dishes. They're spending money on convenience.
• Person 3 needs to get out of the house after working from home all day. They're spending money on atmosphere or novelty.
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So what are your values? Does your monthly spending align with what you say is important to you?

Before your next purchase, take a few moments to ask yourself - what value am I actually buying here? Will this item deliver that value? Is this actually worth it to me?

Hit reply, and let me know your #1 spending value, or the #1 thing you've been spending in circles on. I'd love to hear from you.
Nick