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Financial minimalism is a growing trend in the world of personal finance.
The idea is to enjoy life more by removing unnecessary financial clutter and simplifying your money choices.
In this article, we will discuss what financial minimalism is exactly, the benefits you can experience, and how you can achieve it!
We will also provide fourteen tips to help get you started!
Table of Contents
What is Financial Minimalism?
Financial minimalism is living with less financial clutter by consciously deciding to spend less and save more. They believe in living a simple life free of debt and other financial burdens. Financial minimalists focus on quality over quantity.
The main reason why many people are drawn to financial minimalism is that it emphasizes living a simple life.
It’s about being intentional with your money and only buying things that add lasting value to your life.
Give it a try; you might enjoy decluttering your life and living with less spending or only spending on things you need.
For some, it may be a way to save money and become debt-free. Others may want to downsize and live a more sustainable lifestyle. Financial minimalism can help you achieve these things!
It differs from traditional minimalism because it focuses on reducing expenses and debt rather than just on physical belongings.
For example, a physical minimum might live in a small house or apartment and own only a few items of clothing.
A financial minimalist may have a similar lifestyle, but their focus would be reducing expenses and debt instead of physical belongings. It’s all about living within your means and not getting too complicated with spending, saving, and investing.
Financial minimalists are typically practiced by people looking to save money, become debt-free, remove financial clutter, or downsize their lifestyle.
Practitioners must also learn to be disciplined. A lack of focus can easily lead to overspending.
Benefits of Financial Minimalism
The main benefit of financial minimalism is that it can help you save money. It can also lead to a simpler and more sustainable lifestyle.
In other words, it’s a pathway to a sustainable life because if you over-consume financially, you will always be in debt or working to pay off debt.
Eventually, when it is time to retire, you will not have the funds to do so. Being unable to work and still having to pay off debt is an unhealthy way to live.
Financial minimalism can help you avoid that lifestyle and reach financial freedom sooner!
Reduced stress is another major benefit of simplifying your spending and gaining control over your finances.
Financial troubles are often associated with high levels of stress. So, by decluttering your finances, you can reduce stress and live a more joyful life.
Financial minimalism is important because it can help you find joy while saving money.
If you can live with less, you’ll be able to put more money into savings and investments, leading you to a better and brighter financial future!
Sounds pretty amazing, right?
Now that you know what financial minimalism is, let’s learn more about how you can begin to practice this concept.
How to Practice Financial Minimalism? 14 Tips
One way to start practicing financial minimalism is to save up for big purchases instead of buying on credit.
Another great way is to create a budget and stick to it.
You can also declutter your home and eliminate anything you don’t need or use.Â
Start small and see how it feels to live with less money.
You may be surprised at how much simpler and happier your life becomes! So let’s look at 14 ways you can get started today.
1) Start by evaluating your current spending habitsÂ
Track where you are spending your money for 30 days.
Doing so will help you become aware of your spending patterns. By becoming aware of your spending, you can make changes where necessary.
Once you know your spending patterns, start setting aside monthly money for savings and investments.
Begin with $50, for example. Then, increase this amount each month as you become more comfortable.
2) Set meaningful goals for yourselfÂ
Ask yourself the following questions-
- What do you want to achieve with your finances?
- Do you want to be debt-free?
- Do you want to save for a down payment on a house?
Next, write down some realistic goals with deadlines to help keep you accountable.
3) Unsubscribe from marketing emails and avoid impulse purchases
Dig deep to find out what your needs are and what really adds value to your life. Most likely, you don’t need that new shirt or those shoes.
Unsubscribe from marketing emails so you’re not constantly tempted to spend money.
Do your best to avoid window shopping and visiting malls too often. If interested, I wrote another article about Impulse Buying | Why We Do It And How to Stop!
Looking for an easy way to manage subscriptions? Look no further than ROCKET MONEY. We love how they provide you with the tools to track spending, lower bills, and track your net worth!
See how you can easily cancel unwanted subscriptions and better manage your money!
4) Unsubscribe from paid memberships and unused services
Do you need that gym membership? If you’re not using it, take the time to cancel it.
The subscriptions you don’t use or don’t add value to can clutter your credit card statements and add up over time.
5) Create a capsule wardrobeÂ
A capsule wardrobe is a small collection of clothes that can be mixed and matched to create multiple outfits.
This is a great way to save money and declutter your closet!
By having less selection of clothes to wear, you’ll also be able to spend less time deciding what to wear.
Having a capsule wardrobe is a tactic for many physical minimalists but can also be a mindset reminder for financial minimalists!
6) Sell items you no longer need or useÂ
Have a garage sale, sell items online, or donate them to a local thrift store.
By letting go of old items, you make room for new experiences. 🙂
An excellent way to increase your PASSIVE income is by renting out extra space! With NEIGHBOR, you can easily rent out extra space, such as your garage, self-storage unit, rooms, etc.
7) Start cooking at home moreÂ
Eating out is expensive! Save money by cooking meals at home. You can also save money by batch cooking and meal planning.
Batch cooking is when you cook multiple meals at once and then freeze them for later. Meal planning is when you plan out your meals for the week in advance. Some meal-planning services may be worth using, too.
If you’re busy and want a custom meal plan, I recommend trying out NutriSystem! You can start by taking an easy survey. Then they will send you balanced and nutritious meals and snacks!
You can now buy a month and get an entire month free! – Check it out today at NutriSystem! 🙂
8) Live below your meansÂ
Spend less than you earn and invest the rest. This will help you build wealth over time.
This tip may seem common sense, but it is one of the most important!
9) Be content with what you haveÂ
Be grateful for what you have and learn to live with less. This doesn’t mean you can’t have nice things, but don’t let your possessions own you.
You’ll be much happier when you learn how to appreciate the simple things in life.
10) Invest in experiences, not thingsÂ
Instead of buying material possessions, invest in experiences. This could include travel, going to concerts, or taking cooking classes.
These experiences may seem like they cost more money, but they will result in more happiness and greater memories than any material possession.
11) Be patientÂ
Financial success takes time and patience. Don’t expect to become a millionaire overnight.
The concept of delayed gratification and actively practicing it can be the difference between financial success and failure.
Delayed gratification is the ability to resist the temptation of an immediate reward and wait for a later, possibly greater, reward.
When it comes to your finances, think long-term.
12) Downsizing your home or getting rid of unnecessary expensesÂ
If you have a lot of stuff, consider downsizing your home. This will save you money on rent or a mortgage.
This step can be difficult when pursuing financial minimalism, but it is worth considering.
An investment approach would be to rent out your current residence and then buy a new property while still living within your means.
13) Don’t compare your financial situation to othersÂ
Everyone’s circumstances are different. Focus on your own journey, and don’t compare yourself to others.
Don’t compare your spending to others. For example, if your friends just bought a new car, don’t feel you need to do the same.
People who struggle with financial minimalism cannot get past their insecurities of FOMO (fear of missing out).
14) Automate your financesÂ
Automating your finances is a great way to stay on top of your budget and avoid late fees.
You can set up automatic payments for your bills and have a certain amount of money automatically deposited into savings each month.
By automating your finances, you will stay disciplined with your spending and reach your financial goals.
Conclusion
There are a few different ways to achieve financial minimalism. The most important aspect is to be intentional with your money.
You need to be aware of your spending habits and make changes where necessary.
In addition, try to live below your means. Spend less than you earn and invest the rest. This will help you build wealth over time.
Finally, don’t compare your financial situation to others. Everyone’s circumstances are different.
Focus on your journey, and don’t compare yourself to others.
There’s no one way to achieve financial minimalism. It’s a personal journey that looks different for everyone.
It’s important for those pursuing financial freedom to find what works best for them.
Financial minimalism may not be the right fit for everyone. But if you’re looking to declutter your life and finances, it’s worth giving it a try!
Please comment below with your thoughts and experiences on practicing financial minimalism!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
