5 Simple Tips For Adopting a Financially Minimalist Lifestyle

Krystal Emerson

Hands holding onto money.Alexander Mils/Pexels

The idea of living with less to have more has been circulating for years, and the movement has only grown in popularity. With so many people claiming that this lifestyle can lead you to financial freedom, it's easy to get caught up in the hype. But is there any truth behind these claims? And what are some benefits of adopting a minimalist lifestyle? 

First, let's define what financially minimal means being. A "financial minimalist" is someone who has very little debt, saves as much as possible for retirement and emergencies, spends their money wisely by only buying things they need, and does not feel guilty about living less than an extravagant lifestyle.

One of the biggest challenges for people in today's fast-paced, demanding world is finding time to relax. We are all so consumed with making money and spending it that we forget about what really matters: our health and happiness. When you're not happy, you can't be successful at anything else.  

An easy way to find more free time is by adopting a financially minimalist lifestyle, allowing you to have more disposable income while still feeling fulfilled and content with your life. This living style focuses on quality over quantity, experiences rather than possessions, appreciating what you already have rather than chasing after new things constantly, and aligning your finances with your values.

1. Track your spending

Do you want to adopt a financially minimalist lifestyle but don't know where to start? You must keep track of every dollar that comes into and out of your life for this process. Whether it's through an app on your phone or the computer, make sure it's something easy and convenient for you. 

Make sure everything is categorized correctly (e.g., food, gas) so that if there are any expenses outside of these categories, they can be easily identified and tracked accordingly. It would help if you also wrote down all purchases with the date and time.

Many people think that they are not good at managing their finances because they don't have much leftover by the end of every month. And while living paycheck-to-paycheck may be an inevitable part of being human, there are ways for us all to save some money here and there without sacrificing our happiness or quality of life. 

2. Eliminate or reduce unnecessary expenses

The financially minimalist lifestyle is a movement that encourages reducing or eliminating unnecessary expenses to live on as little money as possible. To adopt the financially minimalistic lifestyle, you must first identify which items are necessary and which ones are not.

Necessary items include rent or mortgage, utilities, groceries, and transportation costs. Unnecessary items would be dining out at restaurants, movie theater tickets, and cable TV subscriptions.

By cutting down these unnecessary expenses, you could save thousands of dollars each year without having to change any other habits in your life. Adopting a minimalist lifestyle doesn't mean you have to give up everything you enjoy or need. It can be as simple as eliminating an expense that isn't worth its cost.

3. Create a monthly budget

Do you know how much money you have coming in each month or what is left over after paying bills and living expenses? If not, it's time to get started on building a budget. Whether you're looking to save more money, pay off debt, or adopt a minimalist lifestyle, creating a monthly budget can help.

Here are some tips for getting started with your first budget: 

  1. List out all of the incoming income from sources such as work, disability benefits, child support payments, etc.  
  2. Identify exactly your fixed monthly expenses, including rent or mortgage payments, car payments, student loans, utilities, insurance premiums, etc.
  3. Decide how much you want to spend each month on variable expenses such as groceries, clothing, and entertainment.
  4. Create a monthly savings goal and apply any leftover amounts toward investing or paying down debts faster.

Once you have your first budget completed, take time every month to review how it went and make adjustments as needed to become second nature eventually. Remember, budgets are not cast in stone. They are simply guidelines.

4. Create a plan to save money and pay down debt

To be financially sound, it is necessary to maintain a healthy lifestyle by paying off debt and living frugally. You must have a plan for your money. This means knowing how much money you make per month and what expenses you'll incur throughout the year to budget accordingly.

It also helps to decide on an emergency fund amount and saving goals so that there's always enough money set aside if something unexpected happens or if monthly expenses exceed income unexpectedly.

To create a plan to pay down debt, you must first figure out what your monthly expenses are currently on all of your cards combined and then write them down on a piece of paper that says "Monthly Expenses." Next, determine the highest interest rate card by looking at their APR rates for each account (APR stands for Annual Percentage Rate). Then list this as the top priority because it costs you more money than any other card does if left unpaid.

5. Commit to living below your means

If you want to avoid a lifetime of debt and have more freedom in your life, then adopting a financially minimalist lifestyle may be the answer. It's not about depriving yourself, but rather about living below your means and cutting out all unnecessary expenses. 

Abraham Lincoln said,

Most people are about as happy as they make up their minds to be.

That is why it's important to learn how to live below your means and adopt a financially minimalist lifestyle. A financially minimalist lifestyle will help you save money, increase your savings account, reduce debt, and ultimately help you become happier with your life. 

Living below your means can be accomplished by avoiding debt, paying yourself first, and minimizing expenses on items you don't need or want. After making these changes, you will have more income left over each month that can be used to pay off debt or invest in other ways. A financially minimalist lifestyle will help reduce stress levels by giving you peace of mind to live within your means while still enjoying life. 

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