Practicing Financial Minimalism [It's Not What You Think It Is]

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What’s the solution to chaos in your financial life?

Cue minimalism.

Minimalism has often been employed in product and interior design, but can following minimalist principles help you keep your spending in check, minimize stress, and improve your wealth building skills?

For many people, understanding the importance of personal finance can help them to reduce worry about money on the daily, aka financial freedom.

You always have the choice to do things differently, and one of the most crucial areas in which you can make actionable changes to move the needle is in money management.

This is where financial minimalism can help save the day.

Let’s take a look at how we can incorporate the concept of financial minimalism into your life.

But first, what is financial minimalism, exactly?

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What Is Financial Minimalism?

Financial minimalism can be used to describe a modern, holistic strategy for tackling money management in a way that is conducive to your mental well-being.

The point of minimalism is to have less things, and everything you do have, must be something that you love. The same applies for finances, financial minimalism is about spending less, but only spending less on things that you do not care for.

Anything that you really enjoy, you can still have. You simply have to be more mindful of what you want to spend your money on, and save the rest for the sake of the things that you do love.

It’s a philosophy for assisting you with achieving financial independence via simplistic means, despite money being a complex topic.

That implies freedom from financial worries, stress, guilt, and anxiety related to self-inflicted dilemmas in terms of your finances.

In the end, it means having a greater freedom of choice, because when your finances are simple, you have more headspace to conquer the rest of your life.

How To Practice Financial Minimalism

1. Own your finances

It’s easy to see why people feel overwhelmed and guilty about their money. We’re wired to sacrifice what we need for what we want, and we’re prone to making rash purchases that add up. The media certainly doesn’t help in this regard.

However, financial minimalism is taking responsibility and deliberate actions toward financial management, such as recognizing how you spend and making small adjustments where necessary.

If you are an impulse shopper, check out the 1% rule and the 30-day rule to help you spend better.

2. Take Action

It’s easier to bury your head in the sand than it is to learn fresh facts, especially when you think it means sacrificing the things you love to spend on. Taking charge of your finances allows you to make more informed decisions.

Consider consolidating all your finances into a single number which is the amount you can spend each day.

This number should take into account spending on needs, wants, and savings. This way, you can “freely” spend while still knowing you’re in sync with your financial goals.

It’s a straightforward spending guide that can help promote financial responsibility.

3. Feel Empowered

The concept that millennials should feel bad for their spending choices has worn us out culturally.

The shackles of financial pressures are both common and readily controlled, whether you’re drowning in debt or merely struggling to manage your day-to-day spending.

Financial minimalism entails the process of freeing yourself from the stress of such circumstances. It’s fairly simple once you get the feel of it.

4. Find A Balance

We’re always comparing our lives to others, which leads to negative societal pressure.

We’ve designed our life around the desires of others, rather than our own aspirations and needs.

Financial minimalism calls for leading a balanced lifestyle and understanding where you are in your financial journey.

You decide what is best for you, and you take solace in being content with it.

It’s about having the courage to defy expectations if they don’t seem right for you, and focusing on what matters most to you.

Benefits Of A Minimalist Financial Approach

You might be aware that in our world, bigger living spaces equal higher rents and mortgages.

An interesting side effect of physical minimalism is not needing as much space to hold all the things you’ve accumulated over the years.

By striving for physical minimalism, you inadvertently end up utilizing financial minimalism too, and that’s a good thing.

1. A holistic path to saving

A smaller property doesn’t have to mean a home that is not spacious or conducive to your style of living. Trimming the fat can also lead to a wonderful realization that your monthly expenses can now be indirectly reduced.

Less things mean less stuff to maintain, leading not only to saving money on your rent or mortgage, but also saving money on utilities.

This can enable you to spend on experiences and other things that you might not have considered before.

By implementing the concept of minimalism, you’re limiting your possessions, and by owning fewer things and spending less money on purchases, you’ll be able to put money towards other financial goals, such as getting out of student debt or paying off your credit card.

Furthermore, you can sell the goods for extra income. A simple yard sale should suffice to be able to quickly offload a large number of items.

2. Consolidation and simplicity

Minimalism can also lead to an understanding that you can combine some of your bills and make your budgeting plan look cleaner.

Since budgeting is the process of creating a spending plan that is based on your priorities, minimalistic budgeting can help you realize a clearer and more concise understanding of your financial life goals.

When you discover the things that are most important to you, budget for it accordingly.