Everything You Ever Wanted To Know About Becoming A Financial Minimalist

Written by Steve Paul

People have a perception that financial Minimalism is about not spending at all costs. Instead, it focuses on questioning your current belongings, future purchases and spending habits.

According to a recent survey, the average household has around 300,000 items and approximately 70% of the people live paycheck to paycheck.

Financial Minimalism is more of a mindset that helps you feel empowered by owning your finances, taking necessary actions and more importantly finding balance.

“There are two ways to be rich: One is by acquiring much, and the other is by desiring little.”

What Will This Article Cover?

The Minimalist Lifestyle is surely about decluttering but more about extracting value from your possessions and purchases. This article focuses on how a minimalist approach helps to simplify expenses and manage your finances better.

In simple words, when you have less to think about, you can track and manage everything efficiently, it reduces stress, anxiety, and more importantly, you step closer towards financial freedom.

#1. Minimalist Mindset

Financial Minimalism is a philosophy that ultimately leads to freedom of choice which gives you more headspace to conquer everything else in life.

Spend Less Than You Make

Whether you are a Minimalist or not, this is the Cardinal Rule. Don’t underestimate the mental drain that comes with financial debt. Never spend more than what you make.

You learn to be self-sufficient and change your priorities from impulsive shopping and fancy gadgets to memorable experiences and value-driven purchases.

Wants Vs Needs (Frugal Living)

The act of being very intentional with your spending is referred to as Frugal Living. Minimalism, at its core, is about classifying your priorities.

Identify, Categorize and Determine your Wants & Needs. Some of the things you’ve indicated as needs might be wants. Focus on Assets, not Liabilities.

Make Sacrifices

The Minimalist lifestyle demands sacrifice. Start minimizing your unnecessary spending habits and the urge to always upgrade.

This allows you to invest your energy on things that genuinely deserve it. You start utilizing your assets and possessions to their full potential.

Having More Time To Build More Income

Minimalism focuses on decluttering and simplifying your life, which leaves you with more time to grow and invest in your wellbeing.

This spare time can be used to pursue your hobby and could provide you with additional passive income.

#2. Minimalist Approach

Simple Budget Tracking

The generic “Budget Categories” cover everything from groceries to concert tickets to take-outs. This system can get complicated, and many people opt out within weeks.

Minimalism lets you overcome your fear of missing out and it makes tracking your expenses simpler. A few priority categories like rent, utilities, groceries, subscriptions, transit, etc. is all you need.

Learn To Live On Less Money (One Spouse)

It may not be possible when you are at an entry-level job position. From the very beginning, learn to live with less and invest everything else in your future and financial goals.

This keeps you prepared for unprecedented events in the future, and the early investments can allow you to retire early.

Question All Your Purchases

Spend with purpose. Ask yourself more profound questions, “How often will I use it?” “Do I already own something that can do the job?” “Do I really need to upgrade?”

Don’t fall prey to brand names, season sales and charm pricing marketing strategies. You’ve paid the price for the stuff you already own, make sure to extract the most value from it before you need to upgrade.

Automated Transactions, Rest Saved & Invested

Set up automated transfers for next months’ expenses, emergency funds, wedding fund, academic savings or your other investments. It not only alleviates uninvited stress but allows you to save first and then spend the remainder.

You don’t wait till month end to deal with how much money is left over; as a result, you have guaranteed savings and achieve your financial targets.

Selling Stuff Around Your House

We all admit to hoarding and having stuff which we rarely use. When you analyze the resale value of all those things, it can make you enough money to spend on something you had your eyes on since a long time.

It not only frees up space but makes way for new things that can add a new dimension to your lifestyle.

#3. Minimalist Habits

2-Week Shopping Ban

With rent and groceries as an exception, every quarter dedicate 2 weeks where you don’t spend money on fun and leisure activities. That doesn’t mean you go out on a shopping haul and spend everything once your ban is lifted.

It might sound very daunting at first, but as you inculcate this custom in your life, you will realize you have everything it takes to be happy.

Setting Up A Probation Period

Studies suggest most of our purchases are impulsive. We head out with a list of necessary items and return spending a lot more due to those special discounts.

Whenever you feel the urge to buy something, list it down in your Wishlist and consider it after two weeks. You will be surprised to know that 95% of these thoughts are just pointless distractions.

Be Smart With Travel Expenses & Gifting

Many times, we overlook the cost when it comes to convenience, but do you really need to spur money for that extra piece of comfort. Limit your convenience costs.

Especially during the holiday season when it’s all about gifts, we sometimes go overboard with self-gifting. Adapting to a Minimalist lifestyle ensures we set a cap for everything and limit our spending.

One credit card to track

Over time we accumulate a lot of cards just for those loyalty points, exclusive discounts and other perks. But what we neglect is the handling charges and monthly deductions we have to pay for in the long run.

Limit the number of cards you use so it’s easier to keep track of all your transactions, deductions and subscriptions. You will have one less thing to worry about.

Wrapping Up…

Everyone is good at drafting a plan, but that’s just the first step. EXECUTE IT!!! That’s where the real change comes from.

Financial Minimalism helps you prioritize your expenditure patterns, track your spending and re-routes your debt appetite. More importantly, you learn to value your time and money.

“Minimalism is asking WHY before you buy.”


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