Living in a minimalist lifestyle has implications for your finances too. How much you minimize your life will have an effect on your finances, either cash flow positive or negative.
Consider, too, that even if you don’t decide to live a minimalist lifestyle – you still can minimize your finances.
One of the first rules of minimalism is that a meaningful life is not dictated by the amount of money you make. That said, you still need some money. However, money may not need to be the primary focus of your life.
How much money you’ll need is determined by how you set up your minimalist lifestyle.
Debts costs you additional (unnecessary) money and complicate the number of things you have to manage. Once you are debt-free, in the cycle by only purchasing things you actually have the full amount of money to pay for.
Having to manage your money in too many places adds to your efforts and stress. Move everything into one checking and one savings account. Do the same with retirement accounts.
Sure, you may want to keep your multiple credit card accounts open for the purpose of better credit scoring – but when it comes to use, stick with one card. It makes it simpler to track, manage and pay.
“Cutting the cord” of cable is one expense many people have gotten rid of. There may be all kinds of subscriptions you pay for that you may not need or don’t constantly use. These just add to your bills and may not be “necessities” of life.
Renting has many advantages for keeping your expenses and worries low. You don’t have to pay: Mortgage interest, home insurance, property taxes, maintenance or repair costs, or HOA fees.
There are times when owning is an advantage. For example, you may be able to purchase a small plot of land and tiny home outright (or even pay them off in as low as 5 years or less). In this instance, you have no ongoing mortgage payment or mortgage interest.
The only ongoing payment you have is property taxes and home insurance, but these can still be quite lower than renting.
Of course you still have maintenance and repair expenses, but on a tiny home these can be very limited.
Deposits: Try to set up all your income for direct depositing. This eliminates your need to go to the bank and make deposits or to mail them in.
Payments: Try to set up all your bill payment to be made automatically, especially those that have recurring fixed amounts. This eliminates small tasks you have to perform – giving you more personal time.
Simplifying: Pay your bills through online bill paying and try to pay all bills in one sitting. For example, most of my bills come near the first of the month (except for one). Therefore, I am able to pay all bills online at one time and I’m done for the month. This is so much faster than paying bills as they come in, and infinitely faster than writing checks and paying bills through the physical mail.
Going paperless for all your bills reduces clutter and actually can be much more efficient for people who itemize their taxes.
Researching, purchasing, tracking and selling each individual stock in a portfolio requires a lot of effort. Not to mention, the effort in and to filing your tax return. Investing in mutual funds, index funds or exchange-traded funds removes all that effort.