It’s no secret I’m kind of obsessed with the minimalist lifestyle.
Owning less stuff and keeping things simple is a passion of mine.
For me, minimalism helps keep my mind clutter-free and keeps my stress level down.
But what does being a minimalist have to do with money habits?
Table of contents
Minimalism and Frugality
Unlike frugality, minimalism is not directly related to money.
Frugal is defined as sparing or economical with regard to money.
Minimalism is about living with intention while removing distractions in order to focus on what we truly value.
There’s a big difference. Being frugal is about saving money and minimalism has very little to do with money.
In fact, there are lots of minimalists that spend as much as the average consumer.
However, being a minimalist can have advantages when it comes to money habits. Since minimalism is about what you value and cutting out the non-essential, reaching financial goals can be accomplished in a much more simplistic way.
The best part about thinking like a minimalist when it comes to your finances [even if you’re not a minimalist] is it just makes life easier.
For more on minimalism and frugality, this is a good read I found while doing research for this post. Minimalism vs. Frugal Living: Similarities and Differences
Minimalist Money Habits to Boost Your Finances
How You Can Benefit From Minimalist Money Habits
Using minimalist money habits, you can gain clarity in your financial situation. It also saves time and yes can save you cash. However, if you continue to spend like normal you’re not going to save a dime.
It all depends on what your financial goals are and what you value.
For me, I enjoy the simplicity of a more minimalist system and it keeps me debt-free. As we all know debt is enslavement and should be avoided when possible.
At the very least, applying a minimalist mindset to money can help you automate your bill payments, reduce papers and clutter, and allow you to simplify your life. [fewer credit cards, loans, etc.]
Financial Values
It’s important to think about what your values are when it comes to money. Without understanding what you value and what you don’t, it’s difficult to gain a clear picture of which money habits are essential and which ones are not.
My values include:
- Living within my means.
- Living as debt-free as possible.
- Having an emergency fund for unexpected expenses.
- Retirement or an end game.
- Not having to think or worry about money [this one’s huge for me.]
With these values in mind, it makes it easier to cut out the non-essential.
Non-essential for me include:
- Frivolous spending and buying low-quality items.
- Purchases I can’t afford and taking on debt.
- Making purchases for items I don’t truly value and love.
- Paying bills by hand and dealing with paper clutter.
- Paying interest on car loans, credit cards, etc.
- Consumerism in general.
These are just examples of what is important to me. By keeping my financial values in mind and cutting out the non-essential I easily reach my money goals and keep my life simple.
Figure out what your financial values are and start cutting out the things that don’t align with those values.
Let’s jump into minimalist money habits you can apply to streamline your life and help reach your goals.
Emergency Fund
Keep an emergency fund of at least $1000.00 or more if you can afford to do so.
What I do is keep my emergency fund in my day-to-day checking account. However, I don’t record it in my checkbook. By keeping it hidden, it acts like free overdraft protection and I don’t spend it.
If for some reason I make a mistake and overdraw my account my emergency fund covers it. Therefore, I never incur any overdraft fees and my emergency fund is easily accessible. However, this only works if you can discipline yourself and not spend it.
Automate
Auto-pay your bills. Most phone bills, internet bills, utilities, etc. can all be put on auto-pay.
I simply receive an email letting me know when the bill is going to be deducted, and enter it into my check register. If the bill isn’t going to be deducted for a few days I consider that money spent as soon as I get the email, that way I don’t overspend. As a backup, in case I forget to enter a bill or don’t receive the email, I have my emergency fund in place so I don’t overdraft.
By using the auto-pay feature on most of your bills you will save a ton of time. I spend approximately 1 hour a week checking on my account and never miss a payment.
Keep Accounts to a Minimum
I have one personal checking account and one savings account. I use my debit card for all of my day-to-day purchases and the savings account just sits in the background.
I don’t use credit cards [I used to have 5] and only spend what I can afford. This also allows me to carry less when I’m out and about.
All of my banking is done online and I don’t receive paper bank statements. The only thing I get in the mail from my bank is the usual change in terms and conditions along with credit card offers that go straight in the trash.
Minimize Debt
I’m not a fan of debt. When you owe money on something you do not own it. If you owe money on a car, for example, the bank owns the car. The same goes for having a mortgage on a house. You do not own the house. Instead, you have a rent-to-own home.
Shift your thinking into owning things you can afford and consider downsizing the things you cannot.
At the very minimum, there is peace of mind in living debt-free.
Use the 24 Hour Rule for Purchases
Whenever you’re getting ready to pull the trigger on a purchase, use the 24-hour rule. Now, I’m not talking about things like groceries and basic household items. I’m talking about special purchases like new electronics, clothing, etc.
Whenever you’re getting ready to make a special purchase wait 24 hours and see if it still makes sense.
Keep the 24-hour rule in mind when you’re out shopping as well. This will help keep you from making impulse buys.
I once debated for 3 weeks whether I wanted-needed a new travel mug that had caught my eye while shopping with Samantha. I ended up buying it but not until I was absolutely sure that I would love it.
This brings me to my next minimalist money habit.
Love What You Buy
Whenever You’re getting ready to buy something new make sure you’re going to love it. There’s nothing more wasteful than spending money on something only to have it kicking around months later because it wasn’t what it was cracked up to be.
For example, I spent a month deciding on a new travel bag. A month is a little ridiculous however, I knew that it was something that I would probably be using for the next twenty years.
I needed a quality bag and one that I knew I would love.
Tips to make the best purchases:
- Spend more and buy high-quality items that will last.
- Spend less on items that are considered throw-away items or items that will become outdated. [Think things like cell phones, computers, coffee makers, Etc.]
- Consider refurbished electronics instead of new ones.
- Buy items that are tried and true. [Your favorite brand and size of clothes, a pair of shoes you’ve owned before, items that lasted for years without problems, etc.]
- Research new purchases. Even small ones to make sure the item fits your needs.
- Make purchases based on online reviews, along with opinions from friends and family.
Look for Deals on Big Ticket Items
I’m not sure there are too many minimalists interested in coupons. I know I’m not one for messing around looking for coupons on a daily basis. However, when we have a large purchase to make, we do our homework.
Shopping for the best deal on big-ticket items is definitely worth your time.
For example, we were purchasing a new washer and dryer from a large retail chain a few months ago. After shopping around and comparing we finally figured out what we were going to buy and where we were going to make the purchase.
The store we were going to buy from had a price match guarantee. After getting online we found the same appliances at a tiny appliance store 4 states away for hundreds less than what we were going to pay.
After showing them the website the store dropped the price saving us a few hundred dollars.
The point is, it pays to think outside of the box when making more expensive purchases.
When it comes to the smaller items, I just buy what I need because the savings potential isn’t nearly as big. However, taking the time and doing the research is worth it on big-ticket items.
Final Thoughts
Minimalism is different for every person and so are minimalist money habits. However, you can use your own strategies to simplify your money system and make your finances streamlined.
The important thing to practice is, keeping your financial values in mind and cutting out the non-essential.
I hope you found this post helpful. If you did, please share with others.
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