I don’t know about you, but sometimes, financial freedom sounds like nothing more than a financial fantasy. After all, we live in a world drowned by excess, which is why a lifestyle that simplifies all of our spending decisions and makes budgeting and saving easier sounds too good to be true. The truth is, though, minimalism is anything but—and it just might be the key to finding financial freedom.
Minimalism is all about living intentionally. When you approach finances from a minimalist standpoint, you create better money habits and save more because you’re only buying things that serve a direct purpose. So if you’re ready to level up your finances and simplify your spending decisions, you’ve come to the right place. With these tips, you can apply the principles of minimalism to money and find financial freedom. Keep on reading to learn how.
1. Get clear on what your core values are
The first thing you should do is get clear on what your core values are. This will make applying the principles of minimalism to money much easier because it’ll show you exactly what you want to spend your money on and eliminate wasteful spending. To figure out what your core values are, sit down and think about what matters most to you. Family, freedom, and balance are some common core values, but you can scan this list and take the time to brainstorm what means the most to you and what you want to prioritize in your life. Once you’ve done that, spending intentionally will be so much easier.
2. Start spending intentionally
Contrary to popular opinion, spending intentionally doesn’t mean never spending money. Rather, it means spending on things that align with your core values, bring meaning to your life, or that you need to survive. So before any and every purchase, ask yourself if this is something your survival depends on, and whether or not it will bring you any value—monetarily or sentimentally.
If family is one of your core values, you might prioritize spending more time with them. This might mean occasionally spending more on food, drinks, or travel, but it won’t be money wasted because it’s going towards something that falls in line with what matters most to you. Likewise, if freedom is something you value, you might put your money into turning your side hustle into a full-time career and becoming your own boss.
3. Declutter your life and finances
Minimalists live below their means because they aren’t drowned by excess, but before you can start living like this, you need to declutter your life and finances. Look at your financial situation and compare it with your spending habits to see how you’ve been spending unnecessarily and the areas you can cut back in or get rid of altogether. Canceling services or subscriptions you don’t use, meal prepping on Sundays, and hosting girls nights at home are some examples of how you can do this.
In addition, spend a day combing through your home and setting aside items and clothing you no longer need. From there, you can sell these items to make extra money or donate them. For the latter option, donate them to a charity you’re passionate about, or, if you’re eligible for tax write-offs, to a charity that’s IRS-approved. Whatever you decide, you can’t lose—you either get extra money in your pocket, the chance to give back to a good cause, or save money on your taxes.
4. Go on a self-imposed shopping ban
Admittedly, it can be difficult to change your spending habits or differentiate between what you want versus what you need when you’re used to living a certain way, but going on a self-imposed shopping ban for a week or two can help.
A shopping ban is exactly what it sounds like: You don’t spend money on anything but necessities, which includes things like groceries, medications, bills, etc. A self-imposed shopping ban will help break unhealthy money habits, open your eyes to how you’ve been spending excessively, and show you the difference between necessities and luxuries. Once your shopping ban is up, budgeting and spending intentionally will be a breeze.
5. Focus on the quality of what you’re buying
Spending intentionally and strategically means buying less than the average consumer, which is why it’s so important to take into account the quality of what you’re buying. For example, if you live in a cold climate, you need a good winter jacket. This might mean spending more money on a coat at the time of purchase, but if it’s high-quality and durable, it will save you more in the long run because it will last for years.
That said, more expensive doesn’t always mean better—there are many cheaper, inexpensive options that work just as well as their pricier counterparts—which is why knowing exactly what you’re putting your money into is so vital. Always take the time to research whatever you’re buying—read reviews, compare similar items, and so on.
6. Embrace free or low-cost activities
It’s so easy to get caught up in buying “things” to float your lifestyle and whatever you’re into, but the truth is, most of it isn’t necessary. Shed the excess and embrace free or low-cost activities. Going on walks instead of hitting an expensive Pilates class, visiting a museum rather than your favorite bar, or using YouTube for free guided meditations are just a few examples of how you can stay busy, live a fulfilling life, and save.
Embracing free, low-cost activities will show you that you don’t necessarily need “things” to be happy. You may be living with “less,” but your heart and mind will be fuller. And at the end of the day, living with a grateful heart and abundant mindset is key to manifesting and finding financial peace.