I wasn’t very good with money for most of my life. I earned it and spent it; the money went in and out. Since nearly eight out of ten Americans live from paycheck to paycheck, I’m guessing that’s something you can relate to.
We need a more straightforward approach to dealing with money that allows us to focus on the essential things without all the confusion and overwhelm. Today, we’re going to talk about Financial Minimalism. Let’s jump in!
What Is Minimalism?
So, What exactly is Minimalism? It’s really about simplifying your process and reducing the unnecessary, and nowhere is that more relevant than with your money. Of course, you know you should spend less than you make. But that is easier said than done.
It feels like, no matter how much money we make, it always seems to get away from us. One reason could be that many of us feel uncomfortable talking about money. We might fear judgment from our friends or family. But we can only get better if we are open and honest.
Read Financial Books
We have to put our egos aside and learn to focus on the essentials with our money management. I’ve found that reading books about money is one of the best ways to learn about Financial Minimalism.
I’m going to suggest three for you to check out.
- “The Total Money Makeover,” by Dave Ramsey
- “I Will Teach You to Be Rich,” by Ramit Sethi
- “The 7 Habits of Highly Effective People,” by Steven Covey
These books are great motivation and provide valuable insights for getting your finances on track.
The next thing you should be careful of is “Lifestyle Creep.” We also increase our expenses when we get a raise or pay increase. We want to improve our lifestyle by fixing our apartment and getting a better car.
But instead, why not need your current, perfectly comfortable lifestyle and put that money to better use?
Let’s be honest: If we avoid lifestyle creep, we’ll be able to live a lot better and have a lot more security in 5 to 10 years. Yep, we buy a lot of crap.
Most advertising is designed to make us feel like our lives are lacking in something. We convince ourselves that we deserve these things, even if we don’t need them.
We say, “I worked hard. I deserve this purse … or these shoes … or this watch.” But the truth is, you deserve to be “Debt Free.” You don’t deserve to live paycheck to paycheck.
Social media also puts pressure on us. Trying to keep up with the Joneses is a real thing, and if we don’t curate and pay attention to our news and social media feeds, it can be easy to get caught up in this financial spiral.
But here’s the thing: Rich people are rich because they make intelligent choices, not because they spend a lot of money. It is important not to confuse one for the other. It is easy to distract ourselves with shiny objects.
Let’s take YouTube as an example. If you want to start a YouTube channel, it can be easy to think you need to get the “right” camera, the “right” microphone, some other gadget, gimbal, or accessory. But the core of being good on YouTube has nothing to do with those. You can start anytime if you can deliver good, quality, and valuable content for your audience.
The core skill of YouTube is producing good content. But you can do that with a webcam or a cheap cell phone camera. Everything else is just frosting on the cake.
Focus On The Essentials
In the same way, we should focus on the core essentials of our finances. What do you need to buy to enhance your life and relationships? It probably isn’t some fancy gadget or a trip to “Paris.” By focusing on the essentials, we are living the life of a Minimalist.
We are prioritizing the important things over the unnecessary things. When I graduated, I had to give up a few things to make ends meet. I moved in with my parents and lived in their basement for two years. I didn’t go out much or spend extra money. I knew I had to give up some things and focus on my goals. It’s essential to know your “WHY.”
#1 Why are you simplifying your finances and lifestyle?
#2 Why do you want to pay off all of your debts?
#3 Why are you being frugal?
When we understand our motivations, we’ll be able to stop sabotaging ourselves and become financially free. Whether you want to erase your debt, live abroad, or start a new business, if you can’t reduce the unnecessary things in your life, you won’t have the capacity to tackle these new adventures. The basics are pretty simple.
- Spend less than you make.
- Ignore distractions.
- Focus on the essentials.
- Buy what you need and not what someone else says you should have.
It isn’t rocket science, but if you can master these essential ideas, you’ll be on your way to an abundant financial future. Not ironically, less is more. But just because you’re saving more money doesn’t mean you already know what to do with it.
If you want to get a handle on how to handle your money, check out our already published articles.