- Jessica Duncan - Freelance Writer - Canada
Updated: Sep 18, 2021
Where Do Minimalism and Finances Connect?
If you’ve been reading our latest articles on #DigitalMinimalism, you know that reducing clutter not only in your daily life but also in your digital life is so important. Benefits from digital minimalism include: reduced time spent online, improved mental health, more value in your daily experiences, improved concentration, improved filtering of superfluous life experiences, and so on. But what about our other major digital life, beyond social media? What about our finances?
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Can Digital Minimalism Help You Save Money? Since reducing clutter in our lives allows us to focus on the things that matter most, minimalist thinking pairs extremely well with financial responsibility. Your money is a tool that can allow you to engage meaningfully in your life, as long as you’re in control of it (and not the other way around). In a world of clutter and overconsumption, it’s no wonder people overspend, feel anxious and confused about money, and do their best never to look too closely at their chequing account. While finances can seem extremely overwhelming and complicated, with conscious attention, and keeping things minimal, you can feel safe in the knowledge that you know where your money’s going every month, and that it’s going towards things that will actually serve you. Read more about digital minimalism or keep reading for how to implement financial minimalism in your daily life. 4 Tips To Implement Financial Minimalism 1. Educate yourself on personal finances. Unless you have a BA in Business Administration, it is likely that your financial knowledge is pretty slim. The North American school system fails to educate on personal finances and how to take care of your money, so the very first thing you need to do in order to help you stop overspending and start becoming a financial minimalist guru is to read everything you can on personal finances and a minimalist approach to money (this article is a great start!). 2. Identify the difference between needs and wants. For example, groceries are a need. You need to eat. But the $15 dollars you spend on Starbucks on the way over every single time you shop? Definitely not a need. And if you want to treat yourself every once in a while? Go for it. Just make sure you're setting boundaries. Even if you only went and spent that $15 dollars at Starbucks twice a week, you’re still losing out on $120 dollars monthly or $1440 dollars a year. While that might seem worth it, think of if you invested that $1440 dollars yearly instead - in 30 years you’d have $72,509.96 - with over $27,000 of that from the compound interest you’d earn from the stock market. All that money, just from setting boundaries around your weekly snack!
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3. Set Up Automatic Transfers. Setting up automated transfers is a tried and true way to make sure your money is going to the most important things first. Automate your money to transfer to a High Yield Savings Account to maximize your interest potential, your investments, your retirement, and your monthly bills before you even consider your personal spending. Once everything is automated, you no longer have to spend time worrying about where your money is going. Investing the time and effort up front into automation is easily worth never having to worry about where your money is going every month and not having cash shortfalls at the end of the month.
4. Pay down debts first. Before you make major purchases in your life (house, new car, etc.), it’s important to do your best to pay down the debts you do have. Think of debt as mental and financial clutter. Once this clutter is taken care of, your financial journey will only get easier. While you certainly don’t need to never spend money or buy items when paying down debt, using the money you have to minimize the damage of your overspending habits is one of the most important parts of financial minimalism. The more you simplify your finances, the more freedom you have.
What We Recommend
Now that you have the skills, it’s time to put them into practice. The number one bank we recommend for financial minimalism is Tangerine. Tangerine is the oldest and widely accessed online bank in Canada. Founded in 1997 as ING Direct (with a name change to Tangerine when acquired by Scotiabank in 2012), Tangerine helped Canadians begin their journey to solely virtual finances. Thanks to it’s online platform, Tangerine’s lack of overhead costs directly benefit the customer in a host of ways, including higher interest rates on saving accounts and investments, and lower interest rates on credit products.
Chequing and Savings Accounts
Unlike many major Canadian banks, Tangerine does not charge monthly maintenance fees or mandate a minimum balance to keep the account open. Tangerine also waives ATM fees as long as users are withdrawing from one of Tangerine/Scotiabank’s 3,500 ABMs in Canada. They offer introductory interest rates of 2.10% on savings accounts (for reference, this is almost 2% higher than brick and mortar banks) and unlimited transitions and Interac e-Transfers. Your debit card is included and the first cheques are free.
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Tangerine Credit Cards Tangerine's credit cards come with $0 annual fees and offer cardholders up to 2% back in rewards. The bank offers two Mastercards: the Tangerine World Mastercard and the Tangerine Money-Back Credit Card. Tangerine World Mastercard features: ● Unlimited monthly cash back rewards ● Personalized rewards categories ● Boingo Wi-Fi for Mastercard ● Mastercard travel rewards ● On-Demand and Subscription Services ● Rental car insurance ● Mobile device insurance ● Mastercard airport experiences from LoungeKey APPLY NOW
Tangerine Money-Back Credit Card features: ● Unlimited monthly cash back rewards ● Personalized rewards categories ● No annual fee ● 2% cash back APPLY NOW Money Management Tools
Beyond Tangerine’s money saving, spending, investing, and borrowing tools, they have a host of money management tools that make financial minimalism so much easier than traditional brick and mortar banks. One of their most popular features in Tangerine’s money management tools is the goals feature. You can add a savings goal in the Tangerine Savings Account, whether this be for debt repayment, an emergency fund, retirement, or just general savings. If you want to save for a vacation for $5000, you can add a goal for this amount and feel the excitement grow as you get closer to your goal. Overall, Tangerine has a wealth of tools that are perfect for keeping up with your goals and perfect for anyone starting their journey to financial minimalism.
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