How Minimalism Can Improve Your Finances

Minimalism is more than a fad, it’s a lifestyle of living with less stuff and more meaning, that takes commitment and change of mindset.

Minimalism is a movement that focuses on reducing the clutter in your life. This is done both in physical things and distractions. People who embrace this find ways to eliminate distractions from their lives and this in turn opens up more opportunities for them in other areas. Embracing minimalism does not have to to mean that you stop spending money, but it can mean that you may spend it more deliberately and your focus may shift from making the most money possible to enjoying life.

How Minimalism Can Improve Your Finances

Allows You to Prioritize Your Spending

Minimalism encourages you to embrace the things that are most important to you. This will naturally carry over into how you spend your money. If you are not focused on acquiring certain items but more focused on specific experiences, the way you spend your money changes. Realizing what is most important to you will help with your spending priorities and this can carry forward into the way that you handle your money overall.

Living with less will force you to think twice about what you buy. You learn to distinguish your needs from your wants. And if you’re maintaining a debt-free lifestyle, naturally, you’ll approach your spending accordingly.

Minimalism Discourages Excess

The minimalist lifestyle rejects over consumption and instead encourages you to limit possessions to the essentials. This inherently means buying fewer things and spending less money on cleaning, maintaining, and replacing your belongings.

While you can become and be a minimalist without being debt-free, these two lifestyles often go hand-in-hand. Through the process of shedding possessions and from the desire to avoid excess, many minimalists become and stay debt-free by setting realistic goals.

See also: Debt Snowball VS Debt Avalanche: Choosing the Right Strategy for You.

Limits the Need for Things

With this new shift in focus you will often be limiting what you own. Since you own less or spend less on buying items, it can help you if you need to cut back on your spending to increase your savings or pay down debt. Often since you are not buying as much you can put more money towards other financial goals that can help you focus on experiences rather than things. This may mean early retirement or more and better vacations.

You Need Less Room

While practicing minimalism, you need less room to store everything you’ve collected over the years. If you are able to buy or rent a smaller space, not only will this save you on your rent or mortgage, but it can save you on utilities and free up even more money to spend on the things that are most important to you.

More Focus on Financial Goals

This can benefit you as you begin budgeting and setting your financial goals. Budgeting is a spending plan based on your current priorities. As you discover what is most important to you, it becomes easier to decide when and how to spend your money. This also clears up where you need to change how you handle your money, like the amount that you pay in interest each month on various loans.

Consider Selling Items as You Free Yourself of Them

If you are just beginning your journey into minimalism, a great way to start is you can sell the items you no longer want or need. You can use this money to help you begin to clear up the financial clutter in your life, like your debt. As you rid yourself of the clutter in your life, you can use the money to clean up your financial life as well. Holding a yard sale is an easy way to sell a lot of items quickly, as well as craigslist and Facebook Marketplace.

Helps You Find Ways to Simplify Your Finances

There are several things you can do to make handling your finances easier. You can pay your bills all on one day. You can use cash for everyday purchases which make tracking your spending easier. You may also want to use one of the many apps that simplifies the budgeting process. If you find a mobile app that works for you, you can enter purchases on the go and now where you are with your goals and limits. Investing can also be done in an effective and simple manner, consider The Bogleheads’ Guide to the Three-Fund Portfolio.

See also: The Only 3 Books You Need To Retire Rich

Minimalism Encourages Simple Living

Not only is minimalism about having less, but it’s also about doing less,or at least doing less of the things that don’t matter to you. This lifestyle can mean dropping costly commitments and ones that just eat up your time and take away from family time or whatever brings you joy, and for many that is the simple things in life.

Final Thoughts

Like most things personal finance, I don’t think you have to go all out on this one. If you can apply minimalism in some portions of your life it can help in so many ways, such as relieving stresses, freeing up time and space, and possibly allowing you to retire earlier or see more of the world like you always wanted.

One way we got ride of things we couldn’t sell other than donating, was the buy nothing project which is a really cool group that promotes not throwing everything away using second hand and giving withing a community. There are normally Facebook groups for different communities so try it out!

Do you plan on trying minimalism in any way? Or do you already practice it? Let us know in the comments below.

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