How Minimalist Approach Works In Personal Finance

4 mn read

Minimalism applies to financial life just like any other aspect of our daily routine. In fact, the prime reasons to follow minimalism are a) peace of mind with less clutter in the house and 2) reduction of expenses.

Now it is essential to delve into the subject that explains how minimalism can apply to our personal financial life. There are many things that we need to ensure that we apply it in the right manner. Here are the aspects that demand immediate attention to apply minimalism in the way we manage our money.

Get rid of ‘I Don’t Have’ Myth

The human tendency to own material possession is quite strong in this modern era. Being part of a materialistic world, we feel the need to add more, more and more in our stock. It makes us spend extravagantly. We keep feeling some kind of scarcity in our lives and every time it happens, we buy something.

Example – A person with five pairs of shoes cannot resist the desire to buy the sixth and seventh pair due to some urge. In that case, his mind may say ‘I have shoes but I DON’T HAVE LATEST DESIGN SHOES’. Are you clear now?

·         You need to understand that the ‘I don’t have’ urge makes you spend money for no reason. It just makes you add to existing stock. You have the things that fulfil basic needs, but this myth makes you feel that you need more.

·         To stop buying things for no or silly reasons, you need to list the basic needs. Match that list with the things available in the house. For example – 6 t-Shirts and Jeans are sufficient for you, but there is always the excitement to buy more. Why do that if needs can be fulfilled with the exiting clothes?

·         Stop buying things in large quantity because it makes no sense, especially for the things that do not need to be purchased. Sometimes people buy things just to flaunt the quantity. It is like, ‘I have 17 handbags’. 17??? Are you serious?? Can’t it be a bit logical? Why not buy one big tote bag that can accommodate all your small to big stuff super easily.

·         Be mindful about the needs and then it will be easier to differentiate between the needs and the desires. The moment the rationality comes in the spending behaviour, the useless expenses reduce and then get vanished. 

Financial Minimalism Demands to Have Money Goals

In personal finances, minimalism asks you to have some goals because you will follow the rules sincerely in that situation. List the financial challenges in life, and plan for them during the following self-discipline in life.

·         You might want to direct your efforts to pay off debts. Yes, paying off debts is one among the biggest goals of financial minimalism. Pay off the high-interest debts first, and there is nothing like that, then focus on the smallest one. It is perhaps not tricky to get rid of the tiny sum of debt you borrowed through instant cash loan in 1 hour in Ireland.

·         Make short-term and long-term financial goals and plan the minimalism practice accordingly. With fewer expenses, it is easier to complete at least the small ones first. While working on the failure of the plan might happen. It means incapability to control the spending every time. But start again, because recurrence is essential to move on again.

·         Minimalism in personal finance also demands responsible borrowing behaviour. Usually, people take loans for any reason, irrespective of the fact that if the cause is significant or insignificant. There is no problem taking a loan, especially where there are countless affordable deals by loan agencies in Ireland. But the point is to stop and think whether the money has any actual use or not. It means taking a loan for medical expenses is fine but for expensive clothes, not very sensible. Borrow less, and you can remain debt-free easily.

Stop mindless scrolling of shopping sites

 Online shopping is among the most popular and desired online activity worldwide. By 2022, the world e-commerce shopping is expected to grow to 6.54 trillion dollars.

The data above is adequate to indicate how intensely we love to shop online. But is that really a fair treatment to our personal finances? Perhaps, not. Online shopping is not useful unless it is not related to some actual need. Mindless scrolling of shopping sites drives our mind to shop more and without any cause or real need of a thing.

·         Minimalism emphasizes online shopping that is driven by your basic day-to-day requirements. It treats psychology by describing the need for using the mobile less during free time because that time makes you buy carelessly.

·         Most of the people are the victim of the addiction of mindless scrolling of e-commerce websites. They keep moving the screen up and down, feel greedy for beautiful things, add them to cart carefree and buy them. This is against the rules of spending less.

The above facts reveal the approach of minimalism in personal finance. It is basically a new lifestyle teaches to survive in less money. In other words, financial minimalism tells you to spend less than what you earn. Limitless spending, careless borrowing, missing self-discipline in money management are against the rules of minimalism. Try it, because once it shows its progressive and positive results, anyone can fall in love with this approach.

 

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