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Values Based Spending: How to Enjoy Your Money Now and in the Future · Making Cents

• 0:00
  Hey team, it's Francis.
• 0:02
  One of the big money myths I don't like is the idea of being good with your money means you just never spend it.
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  Especially if you're putting together a budget that a good budget means you live like a monk, never do anything and build up a big stack of cash that sits in the bank forever.
• 0:20
  And it's not just me that feels this way.
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  James Blair, a wealth director at Lighthouse Financial, came on the podcast a while ago to talk about values based spending, which is the secret to organizing your money so that your enjoying life both now and in the future.
• 0:35
  If you want to check out his full episode, it's from 22 June 2025.
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  But until then, check out this great highlight of his insights to values based spending.
• 0:46
  You mentioned earlier and you've just sort of hinted at it again about telling clients to spend more.
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  I mean, a look at your budget and actually be realistic.
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  Let's, let's build a budget that is not just who you want to be, but who you actually are.
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  Are.
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  Which I think is one thing.
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  I still struggle with that when I'm looking at my numbers.
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  And let's actually be realistic here.
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  But also this idea of spend more if it's something that you actually want, what are the guardrails on that?
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  Because of course there are limits to this idea of values based spending.
• 1:18
  Right.
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  There's a world where you can use it to justify anything you say, I want a Ferrari, it'll make me happy, give it to me.
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  Well, a Ferrari would make you happy, right?
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  Yeah, for at least a week.
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  It would be quite fun, I'm sure.
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  How do you genuinely assess what is truly going to bring value to my life?
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  What is actually a good purchase to make here?
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  So it's looking at your goals in totality.
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  So the idea is what do you, what do you want to achieve not just in the short term, but the other goals.
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  So what we find is that most people's goals tend to fall in the same kind of areas.
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  So what are the short term things that are important to me in terms of my life right now?
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  Where do I want to live?
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  So that might be, I'm planning to upgrade my home, I want to renovate, I'm going to downsize, I want to rent.
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  Long term, whatever it might be, when do I want to be financially free?
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  So financially free over my time as a financial advisor.
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  At the start, retirement was a word that was used a lot and people still retired.
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  65 now, people don't really want to retire because we're all living longer.
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  People want options.
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  They don't want to be tied, tied to the situation.
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  And then the other category is, you know, around the kids.
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  So what do we want to be able to do for the kids in the future if we've got kids?
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  So some people want to be able to help with first cars, schooling, university, first homes, whatever it might be.
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  And within all of those, those goals, you write them down, you go, when do you want them to happen?
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  How much will it cost?
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  And then you kind of go, from our perspective, like with a financial advisor, start to project all these things out and go, can we do, can we do them all?
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  A lot of the time the answer is is yes, depending on the person's situation.
• 3:02
  But let's say the answer is is no, that you can't do everything.
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  Then financial planning is like essentially like a big game of what would you rather, Would you rather spend more money?
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  Like, do you want to extend the retirement age and maintain your lifestyle?
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  Do you actually not like the kids that much and you want to scrap them?
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  Do you want to spend a little bit less money on travel so you can retire earlier?
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  Is the renovation on the home actually that important?
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  And then you have to prioritize all of these different, these different goals.
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  That's actually how opposed to just buying Ferraris.
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  You kind of have to look at, look at it in totality and go, can I achieve all of my goals now in a scenario where somebody can achieve all of their goals?
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  I'm a big fan.
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  Have you heard of the, the like the book and the concept Die with zero?
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  Yes, I have.
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  But explain it for us again, because some people won't have.
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  And it's a great one.
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  I do recommend for those who like a little read or even an audiobook.
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  I'm pretty sure it's on audiobook.
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  It's a great one.
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  But give us the potted history of it.
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  Die with zero.
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  Pretty much the idea is that money is like energy and essentially across your life, all of your money should be allocated and be spent.
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  Like, you shouldn't be having unallocated money.
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  So for example, in finance, when we're doing financial projections within, like a room for error, you should be like, by the time you hit 1995, all of your money should be gone.
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  If you're dying with lots of money left over, it's missed opportunities.
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  And those missed opportunities can be different for everybody.
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  Maybe we could have lived in that nicer house, or we could have gone on more holidays, or I could have retired earlier from the job that I didn't like.
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  Or.
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  Or instead of letting my kids get to 70 before they received an inheritance, I could give them a warm inheritance or help them with their home, or there's a charity I'm really passionate about that I could have given
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  some money.
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  And from a selfish perspective, I get to see some enjoyment from that as well.
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  So the idea is that we shouldn't be like Scrooge McDuck and be sitting on this big pile of gold.
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  We should be allocating all of our money to different purposes, both now and in the future, and a life well lived.
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  Like I tell my clients, a good financial advisor should make sure you die with less money.
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  And they go like, that's a really weird concept.
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  But money, once again, money is just a tool to enjoy now or later.
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  If you're not going to enjoy it at all, what was the point in earning it?
• 5:17
  Exactly.
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  Exactly.
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  I feel like that there's this real misconception and it's so deeply culturally rooted that I think it's always going to stick around, but I'm always going to push back against it too, that the idea of being good with
• 5:29
  money means you have a big pile of it and you don't touch it and you live this life of deprivation.
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  And I just.
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  That is just such, I think, the wrong way to approach it.
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  Money is a tool.
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  It's a tool for building the life you want.
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  It's a tool for helping people around you.
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  It's a tool for building the future you want.
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  And if you sit down and get strategic with it, I would really hope you can, as you say, maybe you can't do everything.
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  Maybe you can.
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  Awesome.
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  But you can at least look at it and say, what is the big thing I want and how do I use the money to achieve that?
• 5:58
  When you're sitting down with people and you're setting these goals and sort of trying to figure out what they actually want from life, I mean, a.
• 6:07
  How often should you do that?
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  Is that sort of like you sit down once you do it, or should we be doing this every year or whatever?
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  And also, do people ever struggle to actually articulate what they really want?
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  Because I'm sure they must.
• 6:19
  Oh, yeah.
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  And if they're in a relationship, there is a step before that where you, like, pretty much like, I'm a low key, like, marriage counselor.
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  Where, like, I mean, we know that like 50% of people get divorced.
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  And a big reason for divorces around money.
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  Like, I'll give you examples of really bad goals.
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  So a goal Is not we should spend less money.
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  A goal is not I want to buy an investment property.
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  A goal is not I want to have a million dollars in shares.
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  They are bad goals, because what is my motivation to spend less money or buy property?
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  Nobody wants these things.
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  They want what they think doing these things will give them in the future.
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  So you better to do that.
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  If you're in a relationship, what you need to do opposed to telling your spouse to spend less money, which is very common in relationships, because 90% of couples, like, with.
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  With different money personalities.
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  Like, how often do you talk to someone and one's a spender and one's a saver every time.
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  And it creates, like, heaps of conflict.
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  You get home on, like, a Thursday night, you're like, I want to, like, get into, like, a big fight about this.
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  The thing that you need to do is go, what is the life we're trying to build?
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  So what are the things that are important to us as.
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  As a household?
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  And a lot of the time, I find these conversations haven't been happening because they're worried about how they're going to go.
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  There might be, like, a degree of conflict.
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  There's been conflict around it, around it in the past.
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  And then once you kind of go, what are.
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  Like, we've got that framework around, like, the house and, you know, do you feel like you're missing out right now?
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  When do you want to retire?
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  What do you want to do for the kids?
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  And then there's like, a bit of, like, compromise and negotiation between the two.
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  But then once you've got those locked down, then you go, what behaviors, what actions do we need to take to be able to achieve those objectives?
• 8:02
  Because a plan, projections does not make anybody rich.
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  Goals don't make anybody rich.
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  It's the habits and the actions behind it and setting good structure that will get us to those in terms of, like, how often you should, like, review the plan.
• 8:17
  The thing I would say is, like, you think you're going to start here and get to here, and it's just going to be in this nice linear line.
• 8:23
  But as Mike Tyson says, everyone's got a plan until they get punched in the face.
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  You know, we will have.
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  House prices will drop.
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  We will be made redundant.
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  People will get sick.
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  We'll see divorces.
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  We'll have an issue with our, like, our property or whatever it might be.
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  A plan should be reviewed at least once a year because your life's going to change.
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  The plan really shouldn't change.
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  Like, we've got a very straightforward framework for growing wealth.
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  It's adjusting the plan to what's happening in the person's life.
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  The plan only needs to change because of the person, the strategy.
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  And I'm sure you talk about this a lot.
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  People tinker with their finances way too, way too much.
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  It's what happens in people's lives where the plan needs to change.
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  I love that.
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  Okay, so you have a big life event of some kind.
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  It's time to sit down and reassess the goals.
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  And I love that quote as well.
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  Got a plan until they get punched in the face.
• 9:12
  Yeah.
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  Oh, God, the number of times that's happened to me when life just gives me a little punch in the face and you're like, cool.
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  Love that.
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  Love that so much.
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  For me,.
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  This podcast can only give you general information about how things work in most situations.
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  It's not individual financial advice.
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  If you're after that, a financial advisor is always the best bet.