Can you believe that minimalism is one of the ways you can improve your personal finances? If you understand the concept of being a minimalist, you will realize how it can actually work in your favor.
Improving your financial situation sometimes require you to search for personal finance tips that will teach you what to do. There are many tips out there – after all, there is no one-formula to solve the multitude of money troubles that plague consumers. The key is to find one solution that you know will work based on your personality and your unique financial condition.
One of the tips that are usually given to struggling consumers is to adopt minimalism. According to the website, TheMinimalists.com, this is not about having less than 100 things. It is not going totally off the grid to live off what nature will give you. It is not living as a recluse to avoid the influence of consumerism. Minimalism is not all that.
If you want to be a minimalist so you can improve your personal finances, you need to understand what it is all about. The website said that the concept of minimalism is actually about finding freedom. You can use it as a tool to free yourself from the burden of not having enough money. You can free yourself from working too hard just to buy things that you do not really need.
Three important concepts about minimalism that will affect your finances
Minimalism is actually a concept that covers more than your finances. It is a lifestyle that will free you from a lot of worries. That is because it teaches you to simplify your life. When it comes to your personal finances, there are three important minimalistic concepts that can affect it.
- Minimalism is about removing the excess. Consumerism, the opposite of minimalism is all about buying things in excess. These, if you notice are not really necessary to make you happy. In fact, having too many things can actually become a burden. Your things will dictate how big your house should be. It makes relocating difficult because you have a lot of stuff to haul. It also tells you how much money you have to earn in order to keep up with the expenses that come with having all those possessions. Having a lot of assets seem to require a lifestyle that, unfortunately, is quite costly. A consumerist frame of mind will feel the need to live up to the image of having all these things. When you are a minimalist, you will be prompted to remove all these excesses. According to AOL.com, the first step to become a minimalist is to get rid of the things that you don’t use anymore. In other words, you need to declutter. You can start by looking for the things that you haven’t used in a year and disposing of them. You can sell them or give them away. If you sell them, that could mean additional income for you to use on something that is important at the moment. What you cannot sell, just give them to charity.
- Minimalism encourages smart spending. The popular belief is that minimalistic people hate to spend. That is not true. The truth is, this lifestyle encourages you to spend – but you have to do it the smart way. Being smart about your spending does not only mean you do not buy things that you cannot afford. It also means you refuse to buy things that you do not need – even if you can afford it. When you are a smart spender, you should think about priority expenses first before spending on luxurious ones. If what you will spend does not add value or does not have any purpose in your life, then do not spend on it. This will benefit your personal finances because you are able to limit your spending only on what is important.
- Minimalism simplifies your life. The thing about being a minimalist is you will concentrate on what is important. By decluttering your life, you can clean out the things that you do not need. You will only possess what is important to your life’s purpose. Anything that does not matter will have to go. This is the mindset that is very useful in managing your money. Simplifying your personal finances would help clear up the confusion and assist you in making the right decisions that will help you improve your financial situation. Let’s face it – a more simple lifestyle is less costly than an extravagant want. While you may think that being simple is no fun – that is where you are wrong. Minimalism will teach you how to appreciate the simple yet important aspects of your life. Once you learn this valuable lesson, you will realize just how meaningful life is – even without the possessions that you thought you needed to own.
All three of these concepts can help your finances because they will allow you to live life to the fullest without spending so much. Do not think that money will make you happy. It helps, that’s for sure. But it is not the end all and be all of life.
How downsizing can help you improve your financial situation
Obviously, minimalism will involve a certain amount of downsizing. Let us admit it, we come from a consumerist society. Wherever you go, there are various signs and advertisements that will encourage you to buy things and to buy them excessively. The more you have succumbed to this type of lifestyle, the more you have to change before you can be a minimalist. Thankfully, there are a lot of areas in your life that you can financially downsize.
An article published on MakingSenseOfCents.com, the author mentioned three important ways that minimalism helped improve their finances. The first is regarding their budget. As mentioned, this type of lifestyle requires a change in your financial habits. One of the best tools to help you change your habits is to follow a budget plan. In fact, instilling any financial habit usually begins with a budget. You cannot change your personal finances for the better if you have no idea where you stand financially. The second way that minimalism helped is by increasing their income. We mentioned that decluttering, one of the steps you have to go through to adopt a minimalist lifestyle involves selling off old and useless assets. If you sell a lot of your things, that will give you some income to spend – or save. Lastly, minimalism will help you get out of debt. When you spend less because you have simplified your life, that means you have more money to use in paying your debts.
These are some of the things that you will enjoy when you adopt this type of lifestyle. To add to that, here are other things that will benefit you when you become a minimalist.
- Freedom from materialism. This is one of the things that minimalism will correct in your life. You will not feel compelled to buy things in order to show that you are successful. That will no longer be necessary to make you feel personal fulfillment.
- Faster accumulation of wealth. In most cases, those living this type of lifestyle spend below their means. That means your income is way more than what you are spending. It leaves you room for savings. When you can consistently save, that can help accumulate your wealth.
- Foundation for future financial troubles. When you grow your savings, that can be a source of your financial security. In case of troubles, you can be secure that you have the finances to help you get out of a tight fix.
While it may not be related to your personal finances, this is probably the most important benefit of minimalism – it allows you to focus on the more important things in life. It allows you to appreciate the things that money cannot buy and yet can make your life worth living. In the end, this is what will make the most impact in your life.