minimalist approach to personal finance
Minimalists are people who enjoy having the minimum of things in their life. They love an easy life that focuses on doing what they love. They don’t feel like it’s a sacrifice, they hate mess, wasting time, maintaining cars, houses, boats, motorcycles, etc.
They like living spaces that are easy to keep clean and organized. They have simple pleasures that are generally experiences with friends, family, and intellectual pursuits. They are naturally good on the expense side of personal finance, since their needs and wants are few.
If they make a good living pursuing their passion or simply land a job they love, then their personal finances tend to take care of themselves through smart lifestyle choices.
What are minimalist finances?
A minimalist approach to personal finance is spending money mindfully and focusing on the things that matter most and not splurging by buying excessive things that aren’t needed and bring no joy. It’s not about being stingy, it’s about valuing your money and the time you spend earning it and spending only on things that are worth the price and your time. A financial minimalist will own only the things that he uses regularly, that make his life easier and make him happy.
Most minimalists don’t like excessive bills and debt. They like to keep their finances as simple as possible with automatic payments deducted from their accounts and automatic deposits made to their savings and investment accounts. They like their finances like their life, minimal and convenient. They don’t like a messy bank account or uncancelled subscriptions, they keep their bank accounts clean, simple, streamlined and organized. They tend to use simple investment programs, set it and forget them that they don’t have to think about, they just let the strategy take consistent action on deposits and purchases.
A financial minimalist does not feel the need to reward himself with material things and purchases. They prefer to reward themselves with an easy and simple life. Freedom is one of its main values. They feel no drive, need, or jealousy to keep up with other people’s lifestyles. They focus on their own life and their personal finances are a reflection of their values. They focus on needs, not wants. They buy things that make their lives easier, not more difficult, stressed and messy.
How do you manage money as a minimalist?
The key to personal finance is to simply spend less than you earn. The barrier to doing this is usually self-control. A minimalist naturally has self-control as he wants his life to be simple, easy and orderly. Minimalist values are the opposite of the spendthrift and hyper-consumer culture of the United States. This makes it much easier to stay out of debt, spend less money, save, and invest.
A personal finance minimalist applies the principles of minimalism to your money by having only the debt and bills you need. A financial minimalist will own as few items as they need and want. They usually own a house or apartment that is just the size they and their family need. They do not have unused rooms or areas, they optimize their space by size and utility.
They focus on your needs and priorities to spend less money, save and invest more of your earnings, and be aware of your purchases and savings.
A personal finance minimalist wants to buy and own things that bring utility and joy every day. They don’t like clutter and unused items taking up space in your home.
Minimal Finance Tips
- Know your values and prioritize your spending to align with the things that matter most to you.
- Have a written budget or the self-control to live within your means.
- Pay off current debt and stay out of future debt.
- Only spend money on things that give you value equal to the cost.
- Focus on the true utility and buy fewer things.
- Buy things that make your life easier.
- Get rid of things you don’t use every day or every week.
Can minimalism cause financial freedom?
Minimalists prefer focused spending over broad consumerism. They tend to enjoy the simple things in life and also don’t want to be trapped by bills and debt in a job they don’t like.
Minimalists are not materialists, they tend to enjoy more intellectual things. Many minimalists are quite happy to simply walk to a nearby bookstore on a rainy Sunday afternoon and browse over a cup of hot tea. While others may think that happiness is going on a week-long cruise to the Caribbean, that sort of thing rarely appeals to the minimalist. Minimalists thrive to create a life and routine that they enjoy so much they don’t need a vacation.
The minimalist is not susceptible to the lifestyle that many consumers experience. They have no desire to buy a bigger house, rent a nicer apartment, or buy a new car if they get a raise or a promotion. Satisfaction with what they have is their biggest driver of behavior. They also enjoy doing what they love for a living and don’t like complex corporate careers. They don’t find themselves trapped in jobs they hate because they have the ability to meet their minimum financial needs with almost any job they want.
Their lack of debt, bills, and excellent investment habits tend to create a level of financial freedom to choose the job they want or build a business they love. They usually have great flexibility in their personal finances as their needs are few and their energy to pursue their passions is high.
Having no debt and few possessions opens up many possibilities and opportunities that few have once they are tied to big houses, car payments and monthly bills. Minimalists live simple lifestyles and can travel light if they need or want to.
Minimalists have more leeway as they are not trapped in a large debt load and have fewer belongings to manage and deal with on a daily basis. The minimalist lifestyle naturally and automatically solves many of the financial problems that the typical American struggles with. The natural result of a minimalist lifestyle will be financial freedom on some level.