How to Change Your Life by Following These Simple Financial Minimalism Tips
If you’re into the minimalism scene you already know the direct benefits the minimalism lifestyle can bring. We’re going to take it a step further and I’m going to tell you how to change your life by following simple financial minimalism tips.
Let’s first get down to the basics. Financial minimalism is essentially the process of cutting out excessive useless spending and investing more into things that add value to your life. Aka spending money with purpose and intention, rather than random purchases.
Financial minimalism involves not getting caught up and spending on trends or useless entertainment because of boredom. Financial minimalists believe in spending on quality vs quantity and are not materialistic. They understand that if they don’t spend more money on discretionary things, they could have a nicer house where they’ll ultimately spend most of their time anyway. It’s not necessarily about being cheap, it’s about choosing to make purchases with intention.
Money is spent on quality items that were built to last because the rest of the money can be saved or invested to earn more.
Keep track of your spending habits
This may sound obvious but a huge number of consumers don’t track their spending habits. If you don’t track them, you don’t know where you can cut out useless spending.
Take a look at your monthly budget. Find the discretionary categories and track what you’ve spent money on month over month. Add that number up, then total it for the entire year. That is the entire amount you could be saving and/or investing to earn more.
That $100 per month on Starbucks coffee could easily turn into thousands if invested in the right places. Spending hundreds on eating out or shopping could also turn into thousands if saved or invested. The number one thing holding you back from becoming a financial minimalist is your belief patterns. Understand there is a difference between a want and a need and only choose what’s necessary.
Saving money by online shopping is a myth
The pandemic certainly changed spending habits for many, by switching to online shopping rather than in store. Many believe that shopping online will save you money because you can watch what you are spending in your cart, but that’s not always the case.
Things like social media make it easier than ever to spend money online. You can purchase anything now days with the click of a button. While it might seem like you’re saving money by not spending as much each time you purchase something, the little excursions add up quickly if you’re not careful and can become a dangerous habit.
To offset this expense make it your mission to sell what you don’t need before shopping. This will provide you with money towards new items rather than having an excess of old and new while draining your bank account.
Choose quality over quantity
It’s your number one goal as a financial minimalist to only spend money with intention and purpose. It’s ok to spend a bit more on a product if you know you’ll get longer use out of it. Many believe in buying the cheaper option to save money but there’s a good chance it’ll need replaced before it would have if you just spent a little more on the higher quality product.
Think about the last time you wanted something. Did you cut corners and buy a cheaper product because you were worried about the money? If you’re anything like me you may have done so and then ended up spending more money anyway to get the product you really wanted in the first place because the quality was so much better.
This is true for just about any product, good, or service. Think about the quality of the item you’re shopping for vs the quantity. Having more stuff does not translate to more happiness. Adding value to your life is the number one goal, not taking away from it because you overspent.
Save first when you get paid
Make it a habit to save a portion of every pay check as soon as you get paid. Setup an automatic transfer into a savings account so you don’t even have to worry about it. Soon, you’ll forget the money is there and it’ll grow over time. A savings account that will pay you interest is even better!
Start out by saving a small portion of each check if you haven’t before. Make it a goal to set aside a little more from every check until you’ve maxed out your savings possibilities. This way you can ease into cutting back on your spending habits over time while increasing your savings.
Think of it as a game. Challenge yourself to see how much you can put away every month, with the goal being more than the month before.
Work on your beliefs and relationship with money
Your relationship and beliefs about money have a direct impact on your ability to live as a financial minimalist. If you always believe you never have enough, you’re setting yourself up for failure from the start.
Having an abundance mindset is key when it comes to managing your money. Work on telling yourself daily that you have more than enough. When you become more conscious about your spending habits it will be easier to live out of abundance because you will recognize the difference between a need and a want. Having bills means you have the opportunity to live lifestyle others aren’t always able to.
The ability to create wealth happens when you understand your relationship with money. Recognizing that you always have enough will create opportunities for more income.
Summary – How to change your life by following these simple financial minimalism tips
Remember, the number one key to becoming a financial minimalist is to only spend with intention and purpose. If something doesn’t add value to your life, don’t buy it! Take a look at your finances and cut out discretionary spending so you can save money and/or spend it on what really matters and will enhance your life.