Looking for more info on minimalist budgeting? This articles covers each and everything you need to know about minimalist budgeting!
Minimalist budgeting may not be the talk of every table, but in all honesty, it’s only because minimal budgeting is a severely underrated idea, that all of us should know about, and practice, due to its several economic, as well as psychological benefits.
So here’s all you need to know about what a minimal budgeting is, it’s utility to achieve your goals in life, how to go about creating one and imbibing its values.
First off, we must understand what the word “minimalism” means.
“Minimalism is all about living with less. This includes less financial burdens such as debt and unnecessary expenses.”
Apply these principles to financing and there you have it: Minimalist Budgeting.
Minimalist budgeting means prioritizing what you really need, what is genuinely valuable to you, and cutting down on your wants, or things that basically cause cluttering. It is a transition from wasting your money, to using it, this time more wisely.
In other words, it involves spending just the bare minimum.
A misconception that may arise, may be that minimalism compromises on quality. You may think, buying a second hand manual treadmill is what a minimal budget expects from you.
Minimalism promotes expenditure on your needs. Nothing more than that, and also, nothing less either.
So you can buy a pricier treadmill with better ratings, but that’d mean, buy only one for your household.
Needless to say, minimalist budgeting does not always translate to money conservation. Your expenses might still be the same. Your purchases, as limited as they may be, can still be expensive. Because minimalist budgeting does not compromise on quality, but quantity.
Eve though it’s a fact that human wants are unlimited, once you begin purchasing based on your needs, the burden of expenses is high only in the beginning. Over the passage of time, many needs are cut. And it is only the everyday needs for which we have to spend continuously.
To understand this, let us go back to the treadmill example. Once you purchase a treadmill, you wouldn’t buy a fresh one every month, would you? Once the purchase is made, you probably won’t have to buy one in a time frame of 5-10 years at least.
Why did I mention all of that?
Well because there is a good news attached to this. Let us assume your income remains the same in the long-term. Once your needs are met early on, and expenses on the same decrease, you have a greater share of your money left to be conserved.
In other words, the margin between your income and your expenditure will increase. In this way, minimalist budgeting promotes frugality, also called as conservation of money. Here’s a useful like to learn more on saving tips.
By now you must have formed a basic idea of what minimalist budgeting is, and how it is distinguishable from frugality. (To understand the difference better read out article on life changing financial tips!)
But why should you consider forming one in the first place?
- 1 Advantages of minimalist budgeting:
- 2 1.Helps you get out of debt
- 3 2. Gives you the necessary focus on your monetary decisions
- 4 3. Donating becomes much easier
- 5 4. Helps you reduce debt by selling no-more-required items
- 6 5. Helps you get rid of clutter that doesn’t add value to your life
- 7 6. Gives You More Free Time
- 8 How to form a minimalist budgeting habit?
- 9 1. Establish your financial goals
- 10 2. Note your present expenditure patterns
- 11 3. Find ideas to simplify your accounts
- 12 4. Review spendings more often
- 13 Is Minimalist Budgeting For You?
Advantages of minimalist budgeting:
Minimalist budgeting is clearly a concept based in economics. Hence you would be anticipating to read the various economic advantages provided by it. Definitely, minimalist budgeting is a concept surrounding finance and economics. But it also has significant psychological and philosophical aspects attached to it, which cannot be overlooked.
1.Helps you get out of debt
Getting rid of debt opens many doors and gives you the freedom to leave a job that you do not like or take off a year to travel. It is much easier to explore and do the things that are most important to you.
Minimalist budgeting is just one way to get rid of your debts. Learn more about how to manage your debts.
2. Gives you the necessary focus on your monetary decisions
As you discover what is most dear to you, you find it easier to decide where, when and how to spend your cash. It can also help you see areas where you need to change the way you handle your money like the amount that you pay in interest each month on various loans.
3. Donating becomes much easier
When you are practicing minimalism, it is easy to recognize what you can give and how much you can give. It makes your priorities become more flexible and you can change them easily whenever needed.
4. Helps you reduce debt by selling no-more-required items
Once you adopt minimalism, you can sell off the stuff you no longer need. This may help you earn a little more money, and adds to your debt clearance capacity.
5. Helps you get rid of clutter that doesn’t add value to your life
All the unnecessary cluttering agents that enhance your hassles and stress can be reduced to create more space and reduce that claustrophobic element from your life.
The beauty of minimalism is that it helps you notice what you have and potentially reduce the urge to add more.
6. Gives You More Free Time
In the pursuit of practicing a minimalist budgeting lifestyle, one may also find more time to practice their passions and introspect on who they actually are, and what meaning they want to give to their lives. It is a time to free oneself from the act of chasing money, and dive deeper into what bigger goals they should achieve in their life.
It gives you time off to consider the fact that a more divine pursuit in life should be to develop long lasting and healthy relationships with others, foster your talents, acquire a diverse set of skills, while also leaving a positive impact on society.
You get a chance to reduce your stress levels, and hopefully, live a more peaceful, healthy life, both physically and mentally. It also helps you give more of your money to those who really need it. You get to spend more on experiences that you will carry forever with you, rather than on things that are temporary.
The constant worry of financial burdens and debt significantly reduces and you wake up enthusiastic, even on a Monday morning.
If all of that was convincing enough, let us move on to the topic:
How to form a minimalist budgeting habit?
1. Establish your financial goals
Where do you ultimately want your financial life to look like in the future?
Ask this question, and note down your long term and short term goals. Make sure that you arrange your goals in order of priority, so you form a clear picture of goals that are actually necessary and goals that may not be all that important, and might just be a financial burden.
Also make sure that your goals are specific and well-defined.
That your goals are achievable and time bound.
(Your long-term goals and financial security in the future undoubtedly go hand-in-hand. Learn more about financial security)
2. Note your present expenditure patterns
Once you make a list of your annual, monthly, weekly and daily expenses, you can ask yourself whether all of these spendings were necessary or not. You can cut down on the less important expenses and keep only the most valued ones. Do this by comparing your priorities with your financial goals.
3. Find ideas to simplify your accounts
Ask yourself if you genuinely need multiple credit cards, and multiple bank accounts. If it is really not all that necessary, try consolidating all of it.
4. Review spendings more often
Preferably every week, find time to sit and evaluate your expenses and see if you are on the right track, and also see if your spendings are in line with your financial goals.
Is Minimalist Budgeting For You?
At the end of the day, you are the master of your plans, and you must know that there is no right- and-only way of planning your budget. The above are just a few ways you can go about while forming your minimalist budget.
Once you are tuned to this lifestyle, you may eventually come up with better strategies to keeping consistent on the same track.
Everything about minimalist budgeting seems flowery and nice. However, just like everything life has to offer, one must understand there are a variety of things that minimalist budgeting will fail to offer you.
You practice minimalism to free yourself from being preoccupied by money and material things, but ironically, it so happens that you still make money the focus of your life. The materialist concentrates on how to accumulate things, while the minimalist concentrates on how to get rid of those things.
Both are thus preoccupied with the same thing.
Moreover, minimalist financing is probably just a concept for the ones who actually have enough to fund their wants. In other words, you need to be a certain level of rich to opt for a minimalist lifestyle.
You may also feel that you’re comprising on the fun aspects of life. But then again, these concerns are worrying only in the short term. Once you create the habit of being frugal, it really doesn’t seem much of a burden.
The only terrifying aspect of minimalist budgeting is that you realize that the life you’ve been living has been meaningless, and that you were really just dead on the inside. You either find meaning in life or survive and not live. There are no greys.
Many of the practicing minimalists have contributed tons of articles explaining how minimalism changed their life for the better, and how it became their emancipation. A being said, minimalistic budgeting is an idea worth giving a try, at least.