Inflation and Values

Two big themes were on my mind last weekend: inflation and values. Why the former might occupy space in my mind is pretty self-explanatory–it’s hard to take a breath without hearing/noticing how fast prices are rising. Ballooning costs have a macro-impact as well as a micro-impact, and today’s brief is focused on the micro.

At the micro-level, rapid, unexpected increases in prices change how we, you and I, spend our money. Vacations are skipped, home renovations are put off, normal, healthy indulgences take a backseat, etc. The uncertainty we feel causes us to focus on priorities more than ever. Which is exactly what I was feeling this past weekend, and how you may have felt at some point over the past few months.

In last week’s brief, Jared wrote “The common temptation in these moments is to make changes to our investment portfolios, but if you feel compelled to do anything with your money when the market is down, the better answer is to do something with your spending.” Which is exactly right. Times like these are great excuses to revisit our budget or, if we don’t have a budget, to start one. It’s not an overstatement to say there’s no better financial habit to practice (or start) than monitoring spending. Even if you don’t go so far as setting and sticking to a budget, the simple act of tracking spending has multiple benefits. A few that come quickly to mind are control, clarity, awareness of the opportunity to spend less or save more, and certainty, particularly in regards to the inputs into your financial plan.

Maybe the greatest benefit, though, and this brings me all the way back to my latter point, is it allows us to see if our values and our spending are in alignment. There’s a saying in personal finance that’s been quoted so many times it’s hard to know where or how it first started, but it goes something like this: “Don’t tell me what your values are. Show me how you spend your money, and I’ll show you what you value.” More simply,

Spending = Values.


This doesn’t apply to everyone, of course. Those barely eking out a living don’t have the excess to make a values statement with their spending; they’re just trying to make ends meet. But once you get past a certain amount of income it becomes easier and easier to see someone’s values by looking at where their money goes.

As I thought about inflation last weekend, I started looking for ways Emily and I could cut back, but ultimately it led me back to our values and whether or not they are aligned with our spending. I also wondered what someone would think about us, or learn about our values, if they saw how we spent money. (I’m tempted to share that with you. Maybe in a later brief.)

What about you? As you look over your spending, does it align with the things most important to you? If you’re a client, you’ve most likely articulated to us your goals. Is your spending in furtherance of those goals? And if you don’t know where your money is going, if you aren’t tracking spending, how does that make you feel?

As I said earlier, there’s no better financial habit to have than tracking your spending, and the current economic environment provides you with the perfect excuse to get started. There are many benefits, but the greatest is an increased alignment between what we spend money on and what our values are.

If you need help getting started, let us know.

Ryan Smith
[email protected]

Born and raised on the North Shore of Massachusetts, I moved to Raleigh in 2011 to marry my wife, Emily. We have two kids, Jack and Gwen, a golden retriever named Olly, and are members of Church of the Apostles. I have been a Financial Advisor since 2005 and earned a Master’s of Science in Financial Planning from Bentley University in 2007. I became a CFP® professional in 2009, a Retirement Income Certified Professional® in 2015, and a Certified Tax Specialist™ in 2023.