Cut Out Unnecessary Expenses
The next – and perhaps most important – step as you begin your journey as a financial minimalist is to eliminate any unnecessary expenses.
This can include unused gym memberships, streaming services you barely watch, dining out frequently and other costs that drain your finances rather than add value to your life. Consider if the item or service aligns with your values and if there's a more cost-effective way to meet that need.
A common area that financial minimalists will target in their quest for simplicity is subscriptions. In the age of subscription services, it's easy to forget what you're paying for and how much.
Audit your subscriptions on a regular basis and cancel the ones you're not using. Doing this once every couple of months can save money over time and streamline your expenses.
Stop Worrying About The Fear Of Missing Out
"Keeping up with the Joneses," “FOMO,” or whatever you wish to call the societal pressure to spend is the antithesis of minimalism. Avoid the trap of social media and status symbols driving your spending. It’s exciting to see your friend post pictures of their new car, but that shouldn’t pressure you into purchasing a new one if your current vehicle works just fine.
Remember, it's your financial health and peace of mind at stake, not how your life appears to others.
Reduce Your Debt
Though you can certainly live a minimalist lifestyle and still be hanging on to some debt, carefully consider your borrowing habits and borrow only what you actually need. Avoid making purchases on credit cards that aren't necessary and you can't afford.
Make a plan to reduce and eventually eliminate your high-interest debt, namely credit card debt. This is an important step in your journey to financial freedom.
Focus on the debt with the highest interest rate first (the debt avalanche) or the smallest balance (debt snowball) – whichever method motivates you more.
Live Below Your Means
Mindfulness is key when it comes to financial minimalism. Ask yourself whether a purchase is a necessity or a mere indulgence. Wait for a day or two before making nonessential purchases, especially those above a certain threshold. This will reduce impulse buys and ensure that your spending is intentional.
Here's an example. Let’s say you're scrolling on your phone one night and stumble upon an ad for new sneakers on Facebook. They look cool and you'd love to have them, but rather than blindly hitting "Add To Cart," wait a couple of days. Are you still thinking about them? Do you still want them? If you do, then consider the purchase and if it's in line with what your budget. If not, then it's not worth it in the moment.
Donate Or Sell Items You No Longer Need
As you declutter your physical space, sell or donate items that no longer bring you joy or serve a purpose in your life. The money you earn from selling items can be a great starting point for an emergency fund or a new investment.
Most thrift stores are happy to take donations, and you can sell unused items on platforms like eBay, Facebook Marketplace, Craigslist or Thredup.
