It’s no secret minimalist living is a path to financial freedom, but many people define financial freedom differently.
For many people, financial freedom means having money to travel with your family. For others, it may mean being free of debt or getting away from the financial worries keeping you awake at night. Some people think financial freedom means being able to live the lifestyle of their dreams without fear of financial strain.
No matter what financial freedom looks like to you, embracing a minimalist lifestyle will help move you toward your goals. Minimalism and simple living help you to prioritize and discover what you really want out of life.
1. It Helps You Separate Needs from Wants
When you simplify your life, you quickly learn how to separate the idea of need from want.
Need: A requirement for survival, a necessity.
Want: A desire, wish, craving, or fancy.
Now, I would argue you may need something for your emotional or physical comfort as well. For example, you may not need more than one pair of shoes for survival but having a pair of athletic shoes and a pair of sandals is probably a matter of comfort.
Similarly, you may not need family photos, but they are emotionally comforting to keep around.
Separating your wants from your needs isn’t about punishing yourself to live with less, but about prioritizing. The next time you go to the store, do you need a clearance candle? Do you need a magazine? Do you need a big bag of potato chips?
We often say, “I need a vacation,” or “I need to get my hair colored.” But at the end of the day, human beings are quite resilient. We truly need very little to stay comfortable, happy, and even fulfilled.
Minimalist living helps you separate out the idea of what you truly need from the items you simply want. When you stop spending money on wants, whims, cravings, or fancies, you suddenly realize you have more money than you expected!
2. Minimalist Living is Simple
At the core of minimalist living is simplicity. Your schedule becomes simplified, your need for technology becomes simplified, your time becomes more abundant because you face fewer obligations. When you embrace minimalism, stress lessens, and you no longer feel like you are part of the so-called rat race.
When I decided to really start to simplify my life, I was quite surprised at the dramatic way my priorities shifted. I no longer felt like I had to put all my effort into earning more money so I could buy more stuff.
Simple, nourishing meals typically cost less than eating out. If you plan your meals ahead for the week and prepare them on the weekends, weeknights become much less hectic. Better yet, they’re lest costly because you aren’t likely to throw in the towel and go out to eat.
Similarly, when you simplify your wardrobe, you only need the pieces to fit with your capsule or plan. You can mix and match your clothing and you don’t fall for every fad or sale. This helps you save money on clothing and other expenses.
3. Minimalist Living Means Getting Back to Budget Basics
Ultimately, minimalist living allows you to focus on what really matters. You become more directed and purposeful in your actions. When you spend time with people, it’s quality. When you purchase something, it’s because it fills a basic need.
The same applies to your finances. As you simplify your life, simplify your budget as well. Account for your monthly bills, put money into savings, organize your debt pay-off plan, and move forward.
Start by setting up a basic budget. Areas to consider:
- Debt (car, loans, credit cards)
- Monthly expenses (gas, food, entertainment)
These items are your typical “base expenses.” From there, look at what extra spending you can eliminate and use toward paying off debts. Are there subscriptions you could cancel? Do you need several movie streaming services? What about your (rarely used) gym membership?
Once you trim your budget back to basics, finances become simpler and you move closer to the feeling of financial freedom.
4. It Means Living Within Your Means
Many people in today’s world are very comfortable living beyond their means. This means living in a house beyond what they can afford, taking out loans on a vehicle, buying electronics, and spending on stuff they don’t necessarily need.
When you move toward minimalist living, you move toward living within your means. Your life becomes calm instead of chaotic. Instead of an instant gratification mentality, you shift toward thinking, “is this necessary? Can I afford it? Is there an alternative?” Use up items you have on hand before you buy another.
As a society, we’ve become very bad at going without. We all want our wishes granted immediately (this is why many people are addicted to the instant gratification of ordering online). We expect that, with the click of a button, we can have any item we want within a matter of days or even hours.
When you embrace a minimalist philosophy, you start to see the value in waiting and working for what you want. When you wait on a purchase, it seems more special and valuable. If you want to curb your impulse spending, then implementing even a short waiting period will help you gain perspective.
5. It Means Being Resourceful
Do you know how to make small repairs to extend the life of items? Sometimes acts as simple as sewing on a button, repairing a hem, or covering a scratch will extend the life of your purchases for years.
Learn basic repairs, sewing, mending, and other skills to help you save money and limit the need to purchase new items. Often, you can find furniture gently used for cheap or even free, and with a few repairs or a coat of paint, you have a beautiful piece for your home.
Similarly, you can find great second-hand clothing that is easily upcycled with slight alterations. Before you buy a new item for a special occasion, check with friends first to see if they own something you can borrow. If you can’t find anyone with the item, check your local thrift stores. You will be amazed at the treasures you’ll find for only pennies (just be sure you’re only buying items that fulfill a need).
Learn to plant a garden, grow your own herbs, lettuce, and even fresh vegetables. By becoming more resourceful, you’ll maximize what you already own and find innovative ways to upcycle or thrift the items you need. In the long run, resourcefulness will save you a lot of money and put you on the path to financial freedom.
6. It Requires Less Space
People often want a bigger home because they need more room to house their “stuff.” You don’t necessarily need to purchase a tiny home, but learning to live a simple, minimalist lifestyle cuts down on your need for square footage.
After all, if you don’t need space for an overflowing closet, cupboards filled to the brim, or shelves of knickknacks, then you can live in a much smaller footprint.
Ask yourself, is my living space adequate for my needs (and the needs of my family)? Maybe you’ll discover your living space is actually more than you need. If you want to experience financial freedom, cutting back on your rent or mortgage expense is a huge step.
When you cut back on stuff, you may want to sell furniture, collectables, and other items to free up both space and cash flow. Clean out your closets and organize your cupboards. See what you could sell to generate extra income.
Once your home is free of all the extra items, it will feel bigger—maybe even too big! It could be time to consider moving to a smaller space.
7. Minimalist Living Allows You to Pay Down Debt
Living a minimalist lifestyle will allow you to make serious headway on your debt. If you follow the basic budgeting rules, you want to first plan out and organize your monthly budget. Look for wiggle room and then use the extra to pay down your debt.
Fortunately, when you get back to the basics of minimalist living, you may find your simpler lifestyle frees up more cash. I was surprised when I simplified my life. I suddenly felt much less stressed about money. Because I only focused on what I needed to buy when I was shopping, I had extra money to put towards any debt.
You may find it helpful to set aside savings for emergencies before you start working toward paying down debt. Once you have a safety net put aside, pay off your smallest debt first. After paying down your first debt, roll the payment toward your next smallest debt, and so forth. In budgeting, this is called the snowball method.
Using this debt payoff method is a gratifying way to gain financial freedom. You’ll see your debt gets smaller and smaller as you go, and it feels wonderful to pay something off completely!
8. It Means Looking at the Bigger Picture
When you simplify your life, you step back and assess. What really matters to you? What brings you a sense of purpose and fulfillment? What do you really need?
As you answer these questions, you examine the bigger picture in front of you. Suddenly, the fast fix of buying an impulse item in the checkout line or shopping for items you don’t need on clearance doesn’t really seem worth it. These purchases aren’t moving you toward your greater purpose.
It’s amazing how much minimalism allows me to think about the bigger values I hold for myself and my family. For example, I’ve learned the value of spending time together, travelling as a family, and spending quality time enjoying nature. With my eye to these “bigger picture” goals, I prioritize and use our money to get us there.
Most people agree financial freedom means living free of money worries that keep you up at night and add to your stress. It means having money to enjoy time with loved ones, to travel, and to feel your life with new experiences.
Living a minimalist lifestyle actually allows you to maximize your life because you aren’t weighed down by the stuff that really doesn’t matter. You’re only focused on the purchases and actions that truly bring you joy, meet your needs, and move you toward your bigger goals.
If you’re looking for financial freedom, embracing a minimalist lifestyle can help you move toward your goals. Learn to simplify and plan for what really matters the most to you.