A minimalist lifestyle is my secret superpower to achieving financial freedom. That’s right; I’m on track to be financially independent by 45. I save or invest 40% of my income each year, and minimalism is a huge part of helping me save money.
Let’s break this down so that you too can harness the same powers for your own financial plans!
What is Financial Freedom?
Financial freedom is a hot topic, especially on social media, and there’s a lot of different definitions. Me, I’m a traditionalist, and I define financial freedom as having enough financial assets to not need a day job.
And that’s my goal. To have enough money to my name to cover my bills and my fun spending that I don’t need to work. Numerically, I think I need $1.2 million to do that. If everything goes according to plan (fingers crossed!) I should reach that by age 45.
If I reach my goal, I will have reached financial freedom in 28 years. Now, considering that there are currently 47.8 million Americans ages 65 and their average net worth is $170,516, financial freedom is very unusual in the US. The US is a hard place to survive financially, let alone thrive. Most people here are underpaid and struggling with high cost of living.
How My Minimalist Lifestyle Helps Me Save More Money
What’s perhaps even more unusual though, is minimalist. The US is a country of hyper consumers. It’s part of the American lifestyle and identity to have access to whatever we want, whenever we want. We often call this consumption our “personal liberty” or our “right.”
But it’s making a lot of us spend more money than we have. A 2019 survey found that Americans say they are most likely to overspend on online shopping and grocery shopping.
“On average, the weekly amount that people spend — not including bills like mortgage or rent, utilities, etc. — is $340, or $143 more than the average $197 budgeted. That extra spending equals roughly $7,400 each year,” according to this CNBC article.
Now, I’m all for spending on what makes you happy. That might be dinners out, or a new dress. But over-consuming, endless shopping, chasing a retail high…this kind of spending doesn’t even make us happy! It certainly doesn’t bring us closer to financial freedom.
Less consumerism means fewer emissions
I tend to disagree with this spending mindset, and I prefer to live my life in a much more minimalist way. Less consumerism means fewer emissions. Less spending means less clutter taking up space in my house. Less time spent decluttering means fewer items sent to the landfill or ending up in the oceans.
And ultimately, practicing minimalism and values based spending is saving me huge amounts of money. (If you’re more of a video person, you can watch how minimalism is saving me money right here.)
Here are things I don’t buy and exactly how much they save me every year.
Amazon Prime membership: $139/year
Meal Delivery service: $2,880/year
Lunch out 3x a week at $10 per meal- $1,560/year
These costs alone save me $4,579 a year.
I Use Values Based Budgeting
There are other areas of spending I opt out of, but the point is this: I save and invest all the money that I don’t spend on sh*t I don’t want.
This is called values based budgeting, and it’s something I teach others how to do because it works!
Values based budgeting is what helps me understand what I need to buy and what I don’t. Minimalism + values based budgeting is what super charges my savings rate every year.
Exactly How to Use Minimalism to Boost Your Financial Plan
If you’re thinking to yourself “Ok, *I* could use a boost to my savings and investments!” then let’s talk about how a minimalist lifestyle can help you do that!
Review your spending
First, go back over your spending for the last three months. Highlight areas that you regret or don’t even remember spending in. These are good areas to start pulling back your spending in. If you feel badly about the spending or it didn’t even register, that’s a signal that you’re overspending.
Create a values-based budget
Second, create your values based budget for yourself. You can get our 8 chapter budget workbook right here, which walks you through exactly how to identify your spending leaks as well as your spending VALUES- the things you really want to buy to make life awesome.
By buying the items that add a real level of happiness and fulfillment to your life, you will naturally cut out the things that are wasting your money. And these are the things that are currently cluttering up your life.
By reducing spending according to your personal values, you reduce the amount of financial clutter and literal clutter in your life.
And that means more money to supercharge your investments and savings.
So that’s how my minimalist lifestyle impacts my spending, saving, and investing! How can you use minimalism to benefit your money? Let me know in the comments!