Are you living paycheck to paycheck, want to cut your expenses, or save for any future project? Learn some minimalist ways to achieve those goals faster in this article.
For a minimalist, saving money is not a difficult task. It pretty much comes naturally, spending money on more needs and fewer wants allows money to build up faster, to invest, go to an emergency fund, or save for bigger plans like traveling or paying a home.
Whatever your motivation is, minimalism is an ideal tool to help you achieve your goals. In this article, I want to share some useful tips that minimalists apply to manage their money the best way possible.
1 Be careful of the lifestyle creep
According to Wikipedia:
Lifestyle creep, also known as lifestyle inflation, is a phenomenon that occurs when we spend more money on a higher standard of living, former luxuries become perceived necessities.
I went through this phase when I was earning more at my job; luckily, it was a short phase.
I used to blow up all my monthly payments on the most random stuff, like clothes, shoes, and electronics.
The most I spent money on was perfumes, for some reason I was trying to build a collection and ended up buying so many fragrances, many of them with similar scents, I sold a bunch, but I still have plenty to last me a lifetime. I genuinely regret wasting my money like that.
When we earn more, it is natural that we will want better things, but before you start spending, ask yourself if it is indispensable, changing your smartphone for the latest version when the one you currently own works perfectly fine a need or a want?
I'm not saying we should upgrade certain things to make our life quality better and more comfortable, but don't go crazy as there are many things that we might deem as needs when they are not at all.
2 Scale your possibilities
The things people tend to spend the most money on are housing, cars, and entertainment.
You can find entertainment without spending a dime; if you are lucky to live in a city and search for free things to do, there are so many options like free movie festivals, art expositions, and even theatre. You can rent books from your local library and even movies and music, usually for free.
Housing is the category where most people go in debt for years, literally working for the bank. It's great to own a home and knowing you have your little nest on this planet, but make sure you are scaling the house you want with your possibilities.
Many fall for the rat race where they want the best house in the best neighborhood, without realizing its entirely out of their possibilities if you wish to healthy finance be truthful with your options.
3 Pay your car in cash
If you plan to buy a car, don't finance it, look at your savings account and work a budget from there, you may need to add more, but don't buy the car until you can fully pay for it.
By doing this, you avoid the monthly bank payments with the extra interest rate; this will allow you to save for something else.
I'm not a car expert by any means, but I would suggest buying a second-hand car instead of a brand-new one, the main issue with new cars is they start devaluating fast the moment you buy them not worth wasting so much money upfront.
If you choose a second-hand car, make sure it still has a working warranty and examine and professionally prepare the vehicle.
4 Save even in debt
If you are in debt with any financial institution, you should still try to save, no matter the amount collected, this is a good habit to maintain, and the extra saved money can help finish the debt faster.
Some easy ways to save extra money in the house include meal prepping, saving leftovers to eat later, creating new meals, unplugging everything that is not in use, cutting unnecessary or unsued subscriptions, etc.
5 Keep track of your home finances
There are so many different methods out there to help you keep track, the one I use is a simple excel sheet (although I want to try some techniques I've read about like Kakeibo).
I create one sheet per month, with the following columns day, store, product(s) purchased, money spent, payment method, and by the end of the month, I add it all.
It helps me see if I'm wasting more and what are those items I can cut off. This list is only for daily expenses and doesn't include fixed overheads.
Another way is to prepare your monthly budget beforehand, separate your fixed overheads like rent, insurance, internet, water, electricity, etc.
The amount of money you want to save and the remaining are for your expenses. Think of this as a less precise savings method, but its easier to follow and beginner-friendly.
6 Don't value yourself through things
It is not entirely our fault; society and marketing shape our minds, so we value material things as something to define who we are when it isn't.
We are not the things we own or do; you are not the sneakers you wear at the gym, the food in your pantry, the fancy restaurant you went to eat last week, if all those things were gone today, you are still a valuable person.
You are not what you own, and if there are people who valuate you because of that, it's time to stop and meditate.
I hope you found this publication on minimalism and finance useful.
If you need to know more about minimalism and finance, I invite you to see all my publications, where I talk about the minimalist lifestyle and minimalist design.
If you have any questions please write it down below and I'll answer it as soon as I can.
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