Minimalism asks us what do you really need to be happy? How much do you really need to feel secure? And I for one, think these questions are really, really worth answering. And when they are applied to the financial areas of our lives, they can help us build wealth. My minimalist mindset has absolutely helped me build financial security. And I consider it a crucial part of my financial independence journey.
Here’s four minimalism habits that have helped me build wealth
#1: Sell things you don’t need
When I was at my brokest, in my mid 20s, I would sell things that I had previously bought chasing that consumerism, comfort, and use that money to do fun things. Because when I was at my brokest, I was really focused on trying to pay off my debt and I had cut out any and all fun I really had, I was not going out to eat, I was not going out to drink. I didn’t go to like bowling nights, or to any kind of parties and stuff. I didn’t spend any money unless I could find that money already in my house.
So I would go around and I would sell things like old clothes or books. And then I would use that money for a coffee or for a drink and a book. Minimalism tells us to get rid of things that don’t serve us. But financial independence oriented minimalism tells us get rid of those things by turning it into money. You’re getting these things out of your space, but you’re turning it into cash, which you can then use for anything you want. I used it for coffees and dinners out, but you can use it for anything.
#2: Declutter your mindset
I want you to declutter, but I want you to declutter your mind. What I want you to do is to align your core values with your financial actions. Decluttering your mind is essentially removing the voices that tell you to spend spend spend on things that ultimately don’t bring you any more happiness or satisfaction.
For example, I don’t get my nails done, I do not give a crap about my nails. And I honestly sometimes feel like the only mid 30s lady out there in the world who is not getting her nails done weekly, or every other week. It’s just not that important to me. So instead of spending 80 bucks a month on my nails, I’m saving and investing that money and putting it towards my financial independence plan, which matters a lot to me.
You can do the same in your life: spend on what you care about, and try to cut out the areas that you’re only spending on because of social pressure or because of someone told you one time, that was a good thing to do, or you don’t even know why you’re spending the money!
We actually have a whole workbook about spending your values available here!
#3: Choose your lifestyle inflation wisely
Lifestyle inflation is when as you earn more money, you start spending more money. It’s really easy to be strict with your budget when you’re broke, because you just simply don’t have the extra cash. But once you start to establish financial security and your income grows, you have the extra cash. Then it becomes much easier to say, “Oh, get the couch that’s 300 more dollars,” or “Oh, we can afford going out to eat back to back or something like that.”
Now, some lifestyle inflation is fine, I am not here to tell you that you need to live on, you know, $10,000 a year every year for the rest of your life and save all your money. That is not my jam. I used to live on $11,000 a year and it was very, very difficult. And I have no desire to go back to that. Like I didn’t used to have health care. And now I spend almost $400 a month on health care. And guess what that is lifestyle inflation I’m totally fine with, but we want to be in control of our lifestyle inflation.
Some lifestyle inflation absolutely does bring people joy. But you can’t just be spending money because other people spend money on those things or because that’s what you see on TV. It has to be values based spending to actually make you happier.
I’ve already said that I’m not someone who cares about getting my nails done. If I started earning an extra $100 a month is spending that money on getting my nails done is not going to make me happier because that’s not something that I value. And in fact, incorporating that kind of spending into my budget is only going to move me further away from happiness because I’m moving further away.
It’s this mindset of competitiveness and keeping up with the Joneses that can get us in trouble.
#4: Always be learning
Listen, y’all, the truth is, the basics of money are not complicated. It’s earn as much as possible, pay off your debt, save and invest the difference. That’s really all that we’re talking about. Right? Like, that’s the formula for all of us. Now, of course, life makes it more complicated, right, depending on our privileges, and our abilities and our earnings. And what happens because life can get a little bit crazy out here, it’s going to make that saving and investing portion more complicated. Money touches every area of our life. And so I think it’s really important that we always stay learning.
For example, I used to be really, really focused on debt payoff. When I first got into the world of personal finance, I consumed everything I could about paying off debt. And now that I’ve been debt free for a really long time, and I have my savings and investments, I’m much more focused on how do I make my money more sustainable? How do I help others with their money? How do we advocate for change around money at a higher level, these are the things that I’m now learning about. And learning can absolutely be frugal or minimalist, you can get a personal finance book at the library. And of course, you can use your social media as a platform of learning. You can follow us on Instagram here!
So that’s how I use minimalism to build wealth! If you want to learn more, check out the video below.