Do you want to improve your financial life? You’re probably thinking, “who wouldn’t”? However, we often feel bewildered thinking about how to improve our financial lives. Well, one of the ways to do so is by adopting a minimalist lifestyle.
When you follow minimalist strategies, you’ll start focusing on what’s truly important to you. You’ll start valuing experiences over material things.
Following a minimalist lifestyle can help you save more and help you repay your high-interest credit card debts or annoying payday loans. It can help you stay current on your secured loans too.
How to Adopt a Minimalist Lifestyle to Improve Your Financial Life
Here are a few strategies to help you along your minimalist journey:
1. Identify Your Needs From Your Wants
Minimalism allows you to be happy and content with the little things. So, the primary principle is to differentiate between your needs and your wants. You have to identify what is essential and what is in excess.
If you do this, you’ll find that you won’t spend money on items that don’t align with your values.
For example, spending money on healthy food is a need, but ordering food from an expensive restaurant is a want.
2. Organize Your Documents and Get Rid of Paperwork
If you don’t organize your financial documents, you won’t be able to analyze your financial life. Also, get rid of as much paperwork as possible. Lots of paperwork is stressful.
Sort out your documents and only keep the ones that are absolutely necessary. Replace paper account statements with digital ones. This will help you as well as Mother Nature.
Also, if you have a number of financial accounts, try to reduce them. By doing this, it’ll be much easier for you to manage them.
3. Cancel Subscriptions You Don’t Use Very Much
The minimalistic approach is all about simplifying your life. Just think how many subscriptions you actually use. For example, if you have a gym membership but you rarely use it, then cancel it. Instead, work out in an open environment at your local park. Also, you can make it a family affair by working out together.
Likewise, opt for bundling your internet, cable, and telephone service. Think, the fewer payments you need to make, the simpler your life will be. Also, cutting down subscriptions means to make less payment. So, it’s better for your financial life too.
4. Replace Credit Cards with Cash
When you pay with cash, you don’t have to track expenses and need to handle less paper; so it’s good for you.
However, I recommend using your credit cards over debit cards. Using credit cards will give you fraud protection and if required, you can also dispute the transaction. But make sure you repay the outstanding amount at every billing cycle so that you don’t fall into debt.
5. Get Rid of Clutter in Your Home
If you look around your home, you’ll find items that you no longer need. But, you’ve kept them. Get rid of the items you don’t use.
Collect any items that are in good condition and arrange a garage sale. Doing so, you’ll be able to earn a decent amount of money. You’ll also help other people as they can buy what they’re looking for at a reduced price. You can also donate these items to a charity.
6. Plan a Budget to Track Your Expenses
Oh yes, the most important point. Planning a realistic budget. No financial discussion can end without mentioning this point. It’s the most essential part of financial planning.
If you don’t plan a budget and track it, you’ll never know where your money is going.
While planning the budget, identify 3 categories – need, want, and like. Then write your expenses as per these categories to prioritize your spending.
7. Consolidate Your Unsecured Debt Into One
A minimalist approach can help make your financial life simple. Consolidating your debts can help you achieve this simple life, since you’d only have to make one monthly payment towards paying back your multiple debts.
You can approach a consolidation company to get rid of payday loans or credit card debts. You make a single monthly payment to the company and it will take care of the other payments.
If you take out a consolidation loan, you can repay your existing debts with the new loan. And, you’ll have to make a single payment every month to repay the new loan.
And, following the minimalist lifestyle strategies will ultimately help you to save more. You can use the saved amount to get rid of payday loans or credit card debt faster.
As I mentioned in the first point while discussing needs vs. wants, you’ll start valuing things which are necessary in your life. You’ll prioritize debt payments. As a result, you’ll be able to repay your debts relatively faster. And once you start paying your debts off, your motivation and confidence will allow you to become completely debt free.
So, which minimalist lifestyle strategy is most suitable for you to improve your financial life? Comment below!