It’s difficult to self diagnose your own problems. Especially the deep rooted issues. How many people with serious illnesses caused by their own choices show up at the hospital and say something like…

“Hey Doc, I’m sick because I’m overweight and I’ve been smoking cigarettes for years. I’m overweight because I use food as a coping mechanism. My life is really not that bad. In fact, I had plenty of potential to do great things. But after years of telling myself that my life was terrible, it has slowly become that way. I am aware that my own decisions caused most of this. I realize I could take action today and improve my health. I could make a turnaround and do great things in life, and I recognize that, but I am just not willing to work on it. I don’t like change. I am set in my ways. Therefore, my health problems will continue to worsen and likely result in my premature death.”

Many people I see are also sick… financially. I would be completely shocked if someone came into my office and said…

“Hey Daniel, I know I have a very high income but I’m still really stressed about money. It’s happening for a few reasons. I’m working when I wish I could be spending more time with my family. I’m spending money when I know I should be saving more for retirement. I use my extra income to buy more material stuff that’s not really that important, but I really care about what other people think of me & have to keep up my social status. I am aware that my decisions regarding how I spend my time and money are what cause this. I fear the relationship I have with my kids will suffer because of this, and that eventually it could cause my wife and I to divorce. I also know that I could change things and make a full recovery but, ultimately, I won’t because I have decided that my status is what’s most important in my life.”

So this is just an extreme example to make a point… many people face these kinds of problems and fail to acknowledge the underlying issues. Everybody has these underlying issues – the key is finding a way to shine a light on them, taking responsibility, and then making a positive change.

How do you begin to identify and acknowledge your financial blindspots? And if you identify issues, how do you make positive changes? I have found that a values-based expense analysis is a very effective method of identifying financial blindspots. Values-based expense analysis involves measuring the alignment of your spending and your values. And using what you discover to make changes to bring them closer together. I’ll explain more.

What is most important to you?

If this is not clear already, take some time to think about your life and identify what you value most. Take 2 minutes right now and do it. Write down the five things most important to you… this might be family, friends, travel, job… whatever they are, don’t over analyze – just get something down on paper.

Where do you spend your money?


“Show me your checkbook and I’ll show you your values.” – Unknown

Your spending is a fantastic and quantifiable measure of what’s really important to you. If you’re like most people and don’t know where you’re spending, this could be concerning. It’s time for a checkup. Some people just got uncomfortable at the thought of digging into spending – maybe it will show something bad? Maybe you’re spending more than you should? Try thinking of this like a health checkup – something bad could show up but it’s much better to catch now so you can fix it going forward. And if you get a good report, it’s reassuring.

So how do you do this with finances? Really, there are a million options – the key is finding one that works for you. Just pick a system and go for it – you can always change methods if it’s not working for you. Remember, the goal is to simply identify where you are spending your money.

My checkup process

I have tested just about every expense tracking system you can think of and always end up going back to my old school super-simple-system because it works well.

I start by printing the most recent calendar month’s transactions for all our active bank accounts and credit cards. I go through and categorize each transaction. Then I enter all the transactions into my excel worksheet (if you really wanted to go old school, you could use pen and paper for this). But, to reiterate, don’t get caught up in the details. The key is to execute. When in doubt, go simple. Baby steps are better than no steps.

How can you make positive changes?

Now that you have a pulse on your finances, it’s time to audit them from a value lens. Carl Richards with The Behavior Gap taught me this specific exercise. Take the data you have compiled from your expense check up and look at each transaction. Ask yourself the following three questions:
1. Does this expense align with my values today? (the five you listed above)
2. What is the value that it aligns with?
3. Is there a substitute that might cost less?

I’ll use my own recent experience as an example. The following are what we consider most important in our family today:

  • Our Faith (treat our God like a child treats a loving father)
  • Our Marriage
  • Time with Family (in a present manner – not watching TV)
  • Live Healthy and Balanced Lives
  • Strive for Financial Independence ASAP (without sacrificing other more important values)
  • Build Daniel’s Business (people come before profit)
  • The expense under consideration was a sand table we bought for our son. I think it was around $50. And when we dug further, it looked like we were spending at least the same amount every month for similar purchases. So we went through the 3 questions…


    1. Yes (not a confident “yes” but that’s what we put)
    2. Time with Family (kinda?)
    3. This one got me – I remembered the day before my son & I walked to the creek. We threw rocks and played in the dirt. As an activity, it was much more aligned with our values and he enjoyed the creek’s dirt more than his sand table. It didn’t cost anything. This was an easy YES for me and my wife. We decided to stop buying random toys and ramp up the outdoor activity. We also chose to ramp up the 529 by $50/mo (with our new found money). $50/mo for 15 years at 6% growth ends up being $14,415. I know there is inflation and all that – but either way, it’s a pretty big number! (to clarify, our kids already have plenty of toys – it’s not like we are eliminating toys from our house, we just don’t NEED to buy more)

    It gets exciting when you begin to realize that it’s possible to redirect your spending to things that are way more valuable to you (if it’s not exciting, revisit your values). Think about cable TV… that would be tough to run through the value gauntlet today. Everybody will have different values – the key is reviewing your expenses from the standpoint of what is most important in your life.

    Have you ever uncovered a financial blind spot in your life that was holding you back – how did you work through it? How do you keep tabs on what’s most important in your life? What kind of systems are you using to keep tabs on your expenses?

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