Are you someone that recently discovered minimalism and now wants to be better with money? Or perhaps you’re like me and are interested in personal finance which has led you down the path to minimalism.
Why is that? Why do frugal people discover minimalism and visa versa, minimalists discover frugality?
These are questions I hope to answer today as I explain 8 ways that minimalism and money are related.
How I Discovered Minimalism
As a kid, I showed signs of minimalism in at least three ways:
- Each time I cleaned the kitchen I had to have everything off the counters
- I got so much satisfaction out of finishing all of the food in the pantry
- I loved the feeling of getting rid of unused stuff
At times, I still show the same behaviors and now I think it drives my wife nuts!
In a way, I’ve always been somewhat of a minimalist but I’ve never defined myself as a “minimalist”.
I consider myself more of an “aspiring minimalist.”
I don’t rank high on the minimalism scale but I do love living a simple life, having a neat and clean home, and getting rid of stuff I don’t need.
It wasn’t until I watched the documentary on Netflix called Minimalism that I discovered there are other people with my same tendencies.
I began to see it as a life optimization strategy.
Since then, I’ve learned more about it and discovered that when you’re trying to get the most out of your finances there is a natural progression towards minimalism.
You start to ask yourself, “what do I value and what am I willing to spend my money on?”
Those that actually reach financial independence do it by adopting some level of minimalism in their life.
What is a Minimalist Lifestyle?
First off, what is minimalism?
“Minimalism is a tool that can assist you in finding freedom. Freedom from fear, freedom from worry, freedom from overwhelm, freedom from guilt, freedom from depression, freedom from the trappings of the consumer culture we’ve built our lives around. Real freedom.”- The Minimalists
It’s about eliminating clutter in your life. Both physically and mentally.
Minimalism is cutting out the unnecessary stuff in your life so you can focus more of your time and effort on the things that really matter.
When some people first learn about minimalism, they think, “why on earth would I do that to myself?” But as they learn more and adopt this way of living, it’s hard to go back to your normal way of consuming.
Minimalists search for happiness not through things, but through life itself.
Other than when I was in high school, when I had to have the nicest pair of basketball shoes, I’ve never been that interested in having nice fancy things.
I’ve always driven an old car paid for in cash, had few possessions, and tried to put my money towards savings or just watching my stash of cash grow.
Minimalism is a tool to rid yourself of life’s excess in favor of focusing on what’s important—so you can find happiness, fulfillment, and freedom.
When you call a person a minimalist, you’re describing their interest in keeping things very simple.
What Minimalism Isn’t
Minimalism is not about deprivation. My purpose in living a simple life has never been to get rid of everything in my life.
Many people may associate minimalism in a negative way with these things:
- Getting rid of everything you own
- Intentionally making life harder
- Being cheap
- Not wanting to have fun
- Getting rid of your hobbies or collections
- Having a house that is cold and uninviting
- Being a part of some crazy cult
- Not having kids
- Just getting rid of your stuff
How to Apply Minimalism
It comes down to getting rid of what you don’t value in your life and adding in what you do value.
One way I heard it described is a “valuist.”
These means, if you have a ton of crap you don’t value, get rid of it.
If you have destructive relationships, figure out how to make it better or get rid of that person.
Related: Financially Free By Wanting Less
If you find yourself mindlessly wasting time and scrolling through social media, place limitations.
Each decision you make in these areas of your life has a consequence. Your future self will thank you for making the right decision.
How Are Minimalism and Money Related?
People who find themselves living a simpler life are not worried about keeping up with the Joneses and typically have more money and more peace of mind. On the flip side, people who try to save money and avoid debt, naturally begin to adopt a minimalist lifestyle.
Here are eight ways minimalism and money are related:
1. Minimalism Helps You Prioritize Your Spending
Spending money is a huge determining factor in reaching financial independence. When you have a clear goal in mind you’re less likely to spend money on things that you don’t care about. And as a minimalist, why would you spend money on something you don’t care about?
When you take the time to focus on the things you value, you’ll find that your spending will begin to align with your values.
2. You Spend Less Money On Stuff
It’s scientifically proven that people who spend money on experiences are happier than people that spend money on stuff. By having less “stuff” and more money, you’re going to be able to do more.
As a minimalist, your desire to acquire stuff is lower. Because of this, not only do you have lets things to take care of, you probably have more money in the bank because of it.
3. Save Money On Housing
Because you decided you don’t care about other people’s opinions you buy a house that actually fits your needs. Not just a house or apartment to impress your friends.
Guess what happens when you purchase a home or rent an apartment that fits your needs and is affordable based on your income? You end up with more savings! It’s a miracle, right?
4. Having Clearer Goals
When you apply minimalism to goal setting you delete all the goals your not committed to and you focus on the two or three goals with an insane amount of intensity. Because you’re focused more on a few goals, you’re more likely to reach those goals.
Most goals require some amount of money. If you’re trying to save money and get out of debt, maybe a minimalist lifestyle will help you get there faster?
5. A Focus On Living Debt-Free
This is probably one of the biggest benefits of living a simple life.
You do everything you can to shake off the chains of debt. That way all of your extra money at the end of the month isn’t going to pay off things that you already experienced.
You actually get to keep the money and have peace of mind of knowing you’re 100% debt-free.
6. Making Money Selling Stuff
Looking to make a little extra side income? Perhaps you’re looking to make a quick $500 this weekend?
The best way that I know how to do that is to sell your unwanted stuff. Things lie an old computer, old phone, clothes, etc. Not only are you simplifying your life, but you’re also building up your bank account.
7. It Can Simplify Your Financial Life
If you live a minimalist lifestyle, you’re most likely going to apply your habits to managing your finances.
Related: How to Simplify Your Financial Life
When you look at simplifying one area of your life, you begin to see new opportunities. There’s a ton of tools out there to help you get out of debt and stay on top of your money.
8. Gives You More Time to Spend On the Things You Value
Money is great, and we all want more of it. But it’s not the actual paper that we like. It’s what we can do with it that makes us happy.
By having more money, less debt, and less stuff, you’re automatically going to have money to spend on things that you value.
Financial independence is largely controlled by your expenses.
What do you get when you combine simplicity with your finances?
You get financial independence.
How to Get Started With Minimalism
No one becomes a minimalist after one day of learning about it. It’s a constant gradual progression into weeding out the unnecessary and replacing it with what you value.
You may be interested in The 30-Day Minimalism Game.
How it works is you get rid of one item a day for 30 days. I’ve heard this is a great way to get started.
I would also encourage you to watch the documentary on Netflix that I mentioned above.