A glaring issue that many of us face today is taking control of our personal finances. With how fast-paced and glamorized the world has become, it’s not uncommon to feel that some unseen force is running our lives and making decisions for us. Not to mention the rise of e-commerce and online shopping, where it seems there’s never a moment where our online shopping carts don’t have pending items.
This problem plagues us all, regardless if you’re a professional in your career or starting out as a freelancer, we are all at the mercy of life’s trials and tribulations.
However, as with all problems that seek to bring us struggles, there always exists a solution. And one, in particular, is catching the eye of many people seeking to turn their personal finances around.
Today, we will learn about Financial Minimalism, and find out how it can help you take back control over your life and personal finances.
What is Financial Minimalism?
In essence, Financial Minimalism is a philosophy that aims to help you achieve financial freedom. To guide you to secure enough savings, diversified income sources, and free you of economic fears and troubles.
It takes after the well-known philosophy of Minimalism, wherein you find contentment and happiness by owning fewer possessions. To intentionally live with only the bare essentials for a comfortable lifestyle and make space for the things we most value.
Financial Minimalism teaches us to use a minimalist approach to managing our finances. To cut out all the unnecessary things we spend our money on, and to keep what is essential. But above all that, it wants us to find balance in our lives and learn to be happy with what we have.
Spend Less Money Than You Make
Even the smartest of people make financial mistakes, and living paycheck to paycheck is a problem that we’ve all met at least once or twice in our lives. And this is where the foundation of Financial Minimalism lies, to first address the concern of our spending habits.
To start, you will want to live by the rules of spending less money than you make. Try analyzing your financial habits, and you might realize critical areas in your budget that you tend to blow your money on. This could come in the form of unneeded subscriptions, overspending on food, or purchasing unnecessary things.
Regardless of what it may be, you must come to the understanding that maintaining these bad spending habits are unsustainable. They will only bring you economic problems and might even spell your financial doom.
Buy Fewer Things, Keep Only What You Need
We get it, once you get the paycheck or land that promotion you’ve been banking on, the sight of more money compels you to buy more things. It’s only natural to feel this way; our brains are hardwired to spend more as we earn more due to the glamorous lives portrayed by media.
However, this way of thinking is very destructive and will only lead you down a treacherous financial path. To counter that, we must learn to buy fewer things, keep what we need, and remember to be content.
Sure, a brand new apartment and the latest car may sound very appealing, but what do these new things offer you other than vanity? You should focus on what’s important; meeting your mortgage payments, paying off your loans, and reinvesting that money back into yourself.
Understand Your Goals
Last but not least, you must understand your goals in life and know the real purpose of why you intend to take a minimalist approach to deal with your finances. By coming to terms with your goals, this will help keep you motivated and prevent you from making any errors along the way. For good measure, you can ask yourself these questions to help you reflect:
- What am I saving up for?
- Do I have an emergency fund to fall back on?
- Am I capable of living financially free ten years from now?
- Am I happy with the current situation of my life?
You can also opt to write your answers down or record them, so whenever you’ve hit a bump, you can always fetch these to put your mind back in the right place.
Pursue Your Passion
Overall, Financial Minimalism is an excellent method of putting our lives back on track, especially if we’re dealing with some financial troubles. The key takeaway is in the absence of needless objects, desires, and wants. This newfound freedom will make way for you to pursue your passion, to have the capabilities of investing in something you genuinely enjoy.