Minimalism has had a profound impact on my finances. I started my minimalism journey about 3 years ago. I was searching for a simpler way of living that would increase my satisfaction with myself, my life and my achievements. The concept of minimalism means to embrace simplicity, enhance utility, and find happiness. It’s literally living a life where less is more. Overtime, I purged my belongings and only kept things that were functional or brought me happiness. Being a minimalist means you are very intentional about how you spend your money. Since I have fully immersed myself in this lifestyle my savings have sky-rocketed. Moreover, now that I’m saving more, my investments have increased exponentially. Now that you know my story, here are 5 ways minimalism improves your finances.
1. You Appreciate Value Over Prices
Minimalists purchase services/products that bring value to them. The focus is on enhancing their lives, not accumulating stuff. Because of this, minimalists will annually purchase just a few functional items that make them feel a sense of fulfilment. On the other hand, most people purchase products that will bring instant gratification that is then thrown to the back of the closet and quickly forgotten. However, minimalists are not most people. They focus on value and fulfilment and therefore they spend less. For example, a minimalist will own 6 pairs of shoes (each for a different occasion) instead of the 15 + owned by the average person. Consequently, they are able to save more, thereby improving their finances.
2. You Consume Less
Minimalists are, by nature, concerned about the impact of over consumption. The more you consume the more waste is produced and the bigger the negative impact of that consumption. That includes the impact over consumption has on your finances. For example, my home has very little furniture. I only have the necessary furnishing needed to make a home comfortable. That includes a sofa, center table, dining table and 4 chairs, bookcase, computer desk and chair, bed, dresser and vanity. Because I have so little furnishing, I do not require a lot in décor because I simply do not have the space (and personally hate clutter). By adopting this minimalist lifestyle, I have saved the money I would use to decorate and buy more furnishing.
3. Your Purchases Align With Your Core Values
Minimalists are not all the same. We don’t throw everything out and live with 5 t-shirts, 2 pairs of jeans and 3 pairs of shoes. Instead, you will find minimalists are intentional about the activities in which they choose to indulge. That is, any product or service that they do purchase must align with their core values. For example, I value relationships. Therefore, when I do decide to indulge, I spend on experiences that enhances the quality of my relationships and strengthen the bond I have with those that I love. By being intentional about their spending minimalists spend less, thus are able to save more of their income. Aligning your purchases with your core values allows you to spend less, thus improving your finances.
4. You No Longer Have To Keep Up With The Jones
Gratitude is one of the foundational principles of minimalism. It is gratitude that enables minimalists to be content and whole with what they have rather than feeling incomplete and miserable from yearning for what they do not. Minimalists exercise gratitude they do not feel the need to keep up with the Jones. Therefore, they will not spend their money trying to appear rich or as someone who they are not. If a minimalist can only afford a used Chevy Cruze, then that is what they will get rather than going into debt to buy a new luxury vehicle. Minimalists will not feel embarrassed or lacking because of the substitute, but instead will feel grateful that they have a functional vehicle that can get them from one location to the next reliably.
5. You No Longer Make Impulse Purchases
As mentioned before, minimalists are intentional about their purchases. Once you have fully immersed yourself in the lifestyle, you develop enough discipline to avoid impulse purchases. For many, impulse purchases is one of the leading reasons they struggle to meet their financial goal. By completely avoiding impulse purchases minimalists have a better grasp of their finances and are more able to achieve their savings goal. As a result, their finances improve also.
The Bottom Line
Minimalism is not for everyone. I found the journey quite awakening and have no regrets about adopting this lifestyle. You are able to take more control of your financial outcome by exercising discipline and self-control. Minimalism is not to go without but simply to seek fulfillment rather than perfection. This is how minimalism improves your finances. While you’re here check out this great post on the fastest ways to save your first $1000.