This concept of minimalism has resonated with me lately. The idea behind minimalism is to live a meaningful life by focusing on living rather than on all the unnecessary ‘extras’. It began with a desire to simply clear physical clutter. However after noticing the positive effects, I realized it could be applied to other parts of my life, including my finances.
It is easy to become overwhelmed with multiple checking and savings accounts, credit cards, monthly bills and unexpected expenses. That last sentence alone makes me dizzy thinking about when funds are coming and going out of my accounts. In order to reduce the stress associated with money, I’ve put together a list of simple steps to help you incorporate minimalism into your personal financial life.
1. Evaluate your budget
I cannot express enough how important it is to start with structuring a budget. Break down how much you are spending each month on every relevant category. As common sense should tell you: you will want to make sure your income is more than your monthly expenses.
Consider streamlining accounts.
- Do you need a separate bank for checking and savings accounts?
- Do you need 5 credit cards instead of just 1? Do you need credit cards at all?
- What loans are outstanding that can simply be paid off?
Having all income deposited and all expenses deducted from a single account provides clarity on your budget each month. You will no longer need to log into multiple accounts to know where your finances stand.
2. Cut unnecessary expenses and reorganize the necessary ones
Even if your budget is balanced, your goal is to simplify as much as possible. Which bills are necessary will vary from person to person. However when you are looking over your monthly expenses, be sure to ask yourself if you can do without or do for cheaper.
Here are some strategies I use personally for my expenses:
- Use automatic payments on reoccurring bills
- Attempt to pay bills less frequently. For example, I pay renters insurance in full every year and auto insurance every 6 months. Typically it is cheaper overall to pay bills in full as well.
- Things can be done cheaper as well as better. A home cooked meal with friends can be just as enjoyable as dinner out at a restaurant.
3. Eliminate debt
Ideally, minimalizing your finances would mean no debt. I mean absolutely no debt – no credit cards, car payments or student loans. This obviously isn’t possible for everyone at all times. However, it should be priority to pay down outstanding balances. Your finances cannot be completely stress-free with debt hanging over you.
4. Need help restructuring your budget?
Contact Apprisen to see how our certified counselors can help. To schedule an appointment call 1-800-355-2227 or visit our website https://apprisen.com.