You may have noticed that many people practice minimalism if you’ve read articles on the personal finance community, or FIRE (financial freedom/retirement early).
People who retire early in their 30s, for example tend to have a minimalistic lifestyle as part of their financial strategy.
The idea of a more sustainable way of life is not new, but it seems to be gaining popularity.
What are the costs to your quality-of-life? Maybe you want a better quality of life?
Here, I will explain what a minimalist lifestyle is and how it can help you with your finances. Also, whether it’s for you.
Table of Contents
What is the minimalist lifestyle?
The Minimalist lifestyle can help your finances
How do I start A Minimalist lifestyle?
Is it good to be a minimalist?
What is the Minimalist lifestyle?
What is a minimalist lifestyle?
The minimalist philosophy focuses on simplifying life, getting rid of unnecessary items and living a life that is more about experiences than material things.
Your life is no longer controlled by your possessions. Instead, you are freed from the need to consume constantly.
The goal is to improve your quality of living by eliminating the things you consider important.
You can see from all this that a lifestyle with less stuff will help you to save money (more about that in the following section).
The minimalist lifestyle can also be intimidating to some people.
Some people get the impression that they are living in a shack on the edge of nowhere, without electricity, running water or other amenities. Some people may choose to live in a shack, but this is the extreme of minimalism.
You may read that many people who achieved FIRE live in tiny homes, travel in airstreams, do not own cars, etc. It’s interesting to read about these stories. There are many examples.
Reddit also has a large group dedicated to minimalism, with over 400,000 members.
It doesn’t necessarily mean that you must adhere to every minimalist philosophy. There are several types of FIRE that don’t require you to be a minimalist or extremely frugal.
Minimalism is about doing and having less of things that are not important.
What is a person who is minimalist?
A minimalist is someone whose lifestyle is very simple. They are decluttered and don’t care about pleasing others. They maximize their potential by using less.
Minimalism in Finances
The Minimalist lifestyle can help your finances
You may already be considering the benefits of a minimalist lifestyle to your finances. I will explore a few of the benefits that minimalism has on your finances.
You can think of a few more, but I kept it simple for this post (See what I’ve done? No? Nevermind).
Here are some of the areas where I believe minimalism is most beneficial to your financial health.
Avoid overspending by minimalism
The minimalist lifestyle helps me to stop spending too much money. You don’t have to buy things all the time.
It forces you to consider the reasons for your purchases and helps you prioritise them.
You should not buy things just because you feel like it. Instead, consider the impact on your finances.
Your financial goals will determine how you prioritize your spending habits. It is not easy to do at first if you have a habit of buying things on impulse.
The impact of not overspending is that you can save more! Having more money to save will also help you pay off any debt faster because you have the ability.
Saving $100k: A Journey to Financial Milestone
Minimalism can help you distinguish between needs and wants
Minimalism also helps you prioritize your wants versus needs. It also helps with your finances and stops you from overspending.
No doubt, our society has a problem with consumption. We want things we don’t need.
Needs can be anything that enhances your life or is essential to living. Money spent now can be used to save money later.
The “wants” we have are the things we need at the time. Like new clothes or video games.
We can also suffer long-term financial consequences from “wants”, such as going into debt or having no savings, because we purchase for immediate gratification.
If you’ve ever read my articles, you’ll know that I don’t mind buying the occasional item that makes you happy. It’s all about finding the right balance and becoming more aware of your needs versus desires.
Minimalism helps shift your mindset
One of the biggest advantages I see in practicing minimalism is that it transforms your mindset from one of a consumer into an investor. It’s a benefit that is related to the aspect of overspending, but it is still a distinct advantage.
A minimalist lifestyle means you spend less money and have less stuff. It may seem difficult at first but this is the first step in acquiring an investor’s mentality.
You may not realize that you are buying less stuff.
Invest only in the highest-valued purchases
Spending less time on activities that are not valuable.
Saving and not overspending are ways to invest in yourself.
You will most likely invest your money in assets rather than liabilities
It is easy to understand why these things have such a profound impact on your personal finances.
How do I start A Minimalist lifestyle?
Are you ready to live a minimalist life? Here are some quick tips to help you get started:
Decide how minimal you wish to be
Start by updating your life
Take out items you don’t use any more
Organise and declutter the home
Remove the emotional link
Find items that can be used in multiple ways
Maximize your space by minimising things
Limit your own stuff and yourself
Is it good to be a minimalist?
A minimalist lifestyle is beneficial for your mental health and financial well-being. You can be more peaceful, in control of your finances, start to prioritize what’s important and have clarity by focusing on minimalism.
This is an overview of the benefits that minimalism can bring to your life. But think about how it will improve it. Maybe it’s just not for you. But there are some principles you can use in your own life.
What is the Minimalist lifestyle?
Do you think this lifestyle is right for you now that you know how the movement can benefit your finances? It depends on both your personality and financial situation.
What makes you happy? What are your financial goals?
What I find cool about this lifestyle is that you don’t have to be extreme, or follow what everyone else might do. You can choose what to simplify and even small amounts can help your finances.
To me, tiny homes, living on the land and traveling in Airstreams are cool. But I also know that this is not something I would want to do for the long term.
I like the idea of trying out new restaurants every now and then. I like to travel, have cool stuff, and drive nice cars. When I can afford to, and in moderation.
But I’ve also stopped doing a lot more things, like shopping, clearing out my closet, upgrading only because I could (like housing), and so on. Simple things like avoiding overconsumption, being happy and not overspending have definitely helped me.
In a sense, I could say that I practice a minimalist lifestyle. However, it is not my life and I don’t think about it very much. Some of these aspects of this lifestyle seem to have been incorporated into my daily life.
Do you want to live a minimalist lifestyle? For the majority of people, I believe that practicing some basic principles is essential for their life and finances. There’s no need to be extreme or aggressive (although you can if you wish).
You can choose to practice minimalism.
