Recently updated on: September 20, 2023
When we hear "minimalism," we often immediately associate it with wearing only a single shade of clothes, owning only one pair of shoes, living in a van, and other stereotypes about having only a handful of possessions and avoiding consumerism altogether.
However, as I learned more about it and as I already mentioned in a different post, minimalism is not just owning less for the sake of it. Rather, minimalism is owning less so you can live life more intentionally.
There are plenty of benefits you can achieve through minimalism, and one of the most significant impacts it can bring to your life is on your personal finances.
Here are some ways minimalism can help you with managing your money.
Table of Contents
1. You Don’t Have To Buy Unnecessary Items.
Almost every item we buy is either a need or a want. However, how you will categorize each purchase will still depend on you and your circumstances.
But once you try minimalism and realize that you don't actually need a lot of stuff, you will also start avoiding unnecessary splurging, which will allow you to save more.
The secret to more mindful spending is by assessing your current need and capacity to buy. You also don't have to get on board with the latest consumeristic trends you don't need.
For instance, buying a new laptop will be an unnecessary expense if you already have a company-issued laptop, especially if you don't need one beyond what you can do using your cellphone.
On the other hand, a new laptop is absolutely necessary if you're a freelancer and your primary gadget is starting to impact your productivity.
2. You Can Sell Some of Your Belongings.
Aside from having more money to save because of fewer expenses through minimalism, you may also scale down and sell some of your seldom-used items.
Selling your rarely used possessions will free up more space around your house, remove unnecessary items you bought, and earn a little extra cash.
You may also donate some things you don't want to sell to less privileged individuals. Just ensure that the things you are giving away are still presentable.
Another indirect result of selling and discarding some of your stuff is your house will be easier to organize and clean.
3. You Don’t Need To Rent or Buy a Larger House.
If you have fewer belongings and items in your house, you can avoid renting or buying a home larger than what you and your family need.
Remember that a smaller house costs less in rent or monthly amortization. These added expenses will be another freed-up expense on your monthly budget.
Sadly, some people are so attached to their items that they will choose to rent storage spaces to have an extension of their house.
By choosing minimalism, you can also avoid renting out storage spaces just to have an added location where you can dump all the junk you are afraid to let go.
Plus, it would be easier to maintain your home if you didn't always have to buy multiple clothes organizers and cabinets so you can have someplace to store your clothes.
4. You Can Have More Discretionary Income.
As I mentioned earlier, by mindfully avoiding buying things that you don't need, you are opening up your budget (hopefully, you do have a budget) for expenses that will pay dividends in the future.
You can use the freed money to increase your emergency fund, add to your investments, increase your insurance coverage, or increase your retirement fund so you can retire earlier.
You can also place that discretionary income into your child's educational fund if you're a new parent, as mentioned in Dave Ramsey's 7 Baby Steps.
5. You Can Avoid Debt.
Consumer debt is one of the most common types of debt many people have, especially once they acquire a credit card.
Our consumerist society keeps telling us that we need this and that so we will be happy or feel good about ourselves, which leads many people to spend more than they make, resulting in debt.
Many people, young and old, will take a loan for ridiculous sums of money so they can buy the latest gadgets, a big house, or a nice car, even if, in reality, they can't afford it.
By incorporating minimalism into your life, you can avoid the urge to splurge on things that don't add value to your life. You can also prevent debt that shackles many people for the rest of their lives.
Bonus: You Will Have More Money To Help Others.
Once you realize that you don't need a lot of things in your life and are beyond blessed with what you already have, your mindset will shift and be a little more generous.
The money that you save through minimalism can be a way to help others, like supporting a child's education or a non-government institution looking for sponsors to support their advocacy.
Final Thought
We live in a time when we are bombarded every day, 24x7, by ads, promotions, and commercials saying that we need to buy many things.
However, if we shift our focus away from ourselves toward the needs of others, then it will be easier to delay upgrading to the latest gadgets, buying your fourth bag, or your fifth pair of shoes.
Remember that we are blessed, so we should also be a blessing to others, just as God has blessed us beyond what we deserve.