Understanding your financial story, and the bigger story, is a part of financial recovery.  When I divorced six years ago, I committed to keep our home.  I was determined that my children be allowed to finish high school without the worse disruption of losing their familiar surroundings.  Divorce is not kind, I had to refinance.  I reentered the work force, eventually starting my own business.  Along the way, I took out a home equity line of credit, in part to pay my share of my daughter’s college tuition.  My plan and hope was to grow out of debt over time.  Like most everyone, I didn’t anticipate that my house value would plummet – by a third.  Now, like many others, we (my new husband and I) have an underwater mortgage.  Reducing our obligations by either selling or refinancing at lower rates isn’t even an option.

For all the blame about being over-extended, the problem faced by individual families is a consequence of a larger structural disconnect.  We are responsible for our own budgetary shortcomings and have to pay the price to recover our equilibrium.  Yet we are not alone, players in a situation that has been long in coming. 

Economic pressures are becoming unbearable.  For years, while production grew, incomes lagged.  American households have been spending money as if earnings were keeping up with the overall economy, while in fact average incomes are no higher than thirty years ago (adjusted for inflation).  We used three strategies to manage this feat (as former Labor Secretary Robert Reich explains in a recent editorial).  First, women streamed into the workforce.  When that no longer sufficed, everyone worked longer hours to make up the gap.  Lastly, we went deeper into debt, tapping our soaring home values.  Now that the bubble has burst, the underlying structural problem remains: even with nearly everyone working to their limit, the vast middle class wouldn’t earn enough to buy what the economy can produce, at the level at which we have grown accustomed to consuming.

Recovering from financial distress requires a different mindset than how you got into this predicament.  Most of us have to cut back, but standard advice for reining in spending can feel punitive.  Like the oversimplified solution of tracking your expenses and eliminating frills.  To be sustainable over time, a budget needs to be based on more than austerity and self-denial.  You need a positive reason to change your behavior that you can own.  A philosophical and value-based appeal that doesn’t make you feel poorer, but like you’re being selective, and choosing more abundance. 

Take the challenge to a higher level; make lifestyle choices meaningful to you.  Consider whether your spending reflects what’s important.  You’ve heard the injunction: “Follow the Money!”   You’ll find it instructive to follow that trail in your own life.  To truly know your mate and yourself, find out how you spend money.  Keen understanding of this constant in human nature was early expressed in ancient writings, in the biblical assertion “Where your heart is, there your treasure will be also.” 
Do you know your heart?  Does how you spend your money reflect what you believe your values to be?  Or is there a dissonance?

If asked, your list of what’s most important to you might include having  time with those you love, staying healthy, good education, being good parents and mates, making a nice home, traveling -- to name a few.  According to the previously-noted truism, those priorities – your heart – would be reflected in where most of your money goes.  In reality, we are endlessly creative, and shrewdly self-deceptive, in allowing ourselves to be distracted and persuaded otherwise.  Many forces, entire industries and media, make it their business to convince that expenditures are “necessary” or reasonable.

It matters to become aware of subtle persuasions that redirect your true intentions.  If the choices you make with your money are not congruent with your real values, then you’re misdirecting limited energy and resources.  What is meaningful to you -- your heart, again -- is neglected.  Over time you’ll feel like you’re spinning your wheels in life.  In a couple, if either or both of you are unthinkingly going down a path contrary to your heart’s desire, frustration, unhappiness, and conflict likely result.
Here are some suggested steps to gain awareness and reclaim ownership.  Track your actual priorities, with an explorative and diagnostic mindset.  Your paper trail doesn’t lie.  Follow the money!  Pull out your bank statement and check register, your credit card statement(s), and any other invoices and receipts.  Remember to account for your cash withdrawals and where that money went.

You’re on a quest to track your treasure, to learn what it can teach you.  Don’t judge; it’s not about whether you spent too much on lattes, shoes, or the latest gadget.  Be gentle with yourself and your mate; nothing closes off communication and openness to change more effectively than criticism and defensiveness.  Adopt an attitude of curiosity.  Make this an opportunity to get to know your loved one and yourself, and to share at a deeper level what is most important to each of you and why.  What are your priorities?  Select appropriate categories for tracking spending.  When in doubt, assign individual expenditures according to your intention.  For example, if you got takeout pizza for family movie-night, then that might better be allocated to Family, or Entertainment, not Groceries.  Beware of “Miscellaneous”; vague categories yield unhelpful clues.

There’s no getting around it: your actual expenses unequivocally reveal what you stand for -- as opposed to what you say you do.  According to theologian Jim Wallis, “a budget is a moral document”.  Your spending choices express how you live out your values.  Can you relate to the priorities you see?  If you see dissonance, you have uncovered indicators that point to helpful changes.  Feel richer on your own terms.  Make your financial story consistent with what you want your life to be about.