Minimalism refers to living a simple life with only essentials. The rest are eliminated. This concept is usually associated with fashion and lifestyle. When someone says “minimalism,” many people think of a house with plain white walls and large spaces with just one to two pieces of furniture. In terms of fashion, one might think about a wardrobe with plain clothes with a monochromatic palette.
But minimalism can apply to money management, too. Even if you don’t want to live a minimalist lifestyle, you can apply it in managing your finances instead. And doing so has many benefits that can lead to financial freedom.
Reduce Spending
Minimalism is about going down to the very essential. Thus, you’ll reduce your spending significantly by applying this philosophy to your finances.
If you become a minimalist, you’ll have to think twice or thrice before buying something. This time, you will buy something not because you simply want to have it but because you really need it. Minimalism will encourage you to focus on acquiring things that will add value to your life. It will also prevent you from getting things just to look good in front of others or to follow a certain trend. With mindful spending, you can also avoid impulsive buying and buyer’s remorse.
Lower Your Living Expenses
With minimalism, you will reduce the things you own and only keep the essentials. This means that you’ll need less space, which can lower your living expenses. For example, if you live by yourself and are renting a one-bedroom apartment, you can easily downsize to a studio apartment if you want to. This will mean lower rent.
Or if you have a house of your own, you can also downsize and get a smaller house. This will mean paying smaller monthly amortizations to your mortgage provider.
Utility bills can also be reduced. You can get rid of or avoid buying appliances or gadgets you don’t need, such as single-use gadgets. One example is an electric kettle. While it’s convenient to have one appliance to heat water in a jiffy, you can do the same using a microwave. Having a smaller space and fewer unnecessary appliances and gadgets means reduced electric bills.
Say Goodbye to Debt
The average debt of an American is $90,460, which includes consumer debt, loans, and mortgages. Paying this off can take a long while, especially since a person doesn’t just pay debts each month but living expenses as well.
As mentioned earlier, becoming a minimalist financially means reducing your spending. As a result, you can put your money on repaying your debts, rather than buying nonessentials. And when you finally pay off your debts, you can also start living debt-free given that your spending is reduced. You can also save more money and become more financially secure and stable.
Earn Some Cash
Living minimally means decluttering your home and getting rid of things that you no longer need. And instead of throwing away your things, you can make some money instead by reselling them.
In recent years, re-commerce is an emerging industry. More people prefer buying previously owned or pre-loved things to reduce their carbon footprint and protect the environment. You can take advantage of this by selling your things that are still in good condition. You can simply take photos of your things and post listings on e-commerce platforms like Amazon, eBay, or Poshmark.
You can have more space after decluttering. After removing all the things you don’t need, you might be able to empty a room, which you can open for rental to earn passive income.
Live Sustainably
Minimalism will also encourage you to live sustainably, which can benefit you financially. For instance, if you choose to follow minimalist money management, you will have to choose the things you buy wisely.
Ideally, you will want to buy durable and cost-effective things. For instance, you might consider buying energy-efficient appliances. While they may cost a little more upfront, they will help you save money in the long run. They’re also known to be more durable than their less efficient counterparts.
This also applies to things you use every day, such as clothes. As a minimalist, you will want to buy simpler clothes but of higher quality. Thus, you will have to replace your clothes less often, which equates to less waste.
Being mindful of the things you own is an essential aspect of minimalism. And if mindfulness is applied to money matters, you can minimize your spending, avoid debt, and save more money. This can jump start your journey to financial security.
