My relationship with money has changed forever, and that’s for real. Since pursuing a more minimalist existence, I treat the money that I have as a privilege, not a right. It’s not something I’m entitled to. It’s something I’m lucky to have.
Nothing is yours except the essential things – air, sleep, dreams, the sea, the sky – all things tending towards the eternal or what we imagine of it.
– Cesare Pavese
And at the risk of sounding a little out there, I’ve recently started to think of money as an extension of my energy.
The money I have is the result of the hours, days and weeks of effort that I’ve invested in order to earn it, so it’s the manifestation of my personal energy.
Energy flows, peaks and troughs. So does money. Sometimes we have it, sometimes we don’t. And by thinking of money as an extension of my energy, I’ve learned to really value that shit.
Plus, I’m now a lot more protective of this energy – and a lot less likely to give it away in exchange for things that I don’t really need.
Money is also freedom. So again, whenever I feel the urge to splurge, I just ask myself; Do I really want to give away some of my freedom in order to buy this drink, this jacket or this gadget?
If this way of thinking appeals to you, then you should definitely check out Joshua Fields Millburn’s awesome article on money and minimalism.
So let me share with you 7 tips I’ve used to manage my money for awesome minimalist living.
And let me put shit in context real quick by clarifying one thing;
Living a meaningful life has nothing to do with how much money you earn.
Ok buddy, let’s go. Tip time.
1. Fall out of love with money
Being in love with money, or drooling over all things material, is not the way to go.
Money can only satisfy temporary, material needs. And the truth is, all things material will ultimately disintegrate, rust and fade away. Possessions can be lost or stolen. Then what?
If you think money alone can make you happy, then think again. It’s an endless pursuit and a hopeless love.
“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”
Instead of being in love with money, accept the fact that money will come and go. When you have it, use it to navigate through life. When you don’t, be happy with what you do have and with where you’ve gotten to. Straight up.
Human nature is kinda funny. We always compare ourselves to those who are richer and wealthier than ourselves. But if we look at how rich we are compared with those poorer than us, things take on an entirely different light.
Remember this and you’ll never yearn for or mourn the lack of money.
Be content. Be happy with what you have.
The possession of money is not contrary to a simplified life, but the love of money is
2. Get your financial house in order
This is a great place to start when preparing for minimalist living. You already have everything you need to get stuck in and by simply organising your shit you can make a really a big difference.
Getting my financial house in order was the first step I took towards budgeting for minimalist living and I made serious savings straight off the bat. Here are some ideas to get you started:
Organise your documents. I bought an in tray and an out tray for processing bills that make their way through my letterbox. I also bought a small file to keep the important documents in, so I know where to go whenever I need to dig out some paperwork.
Review your bank statements. Put on your bifocal and go through your statements with a fine tooth comb. Look at exactly what’s leaving your bank account and when. Write that shit down. Now try and eliminate or reduce the number of things eating up your cash on the regular.
Identify expenses you can cut or reduce. Get militant. Look at any regular expenses or subscriptions you can simply cancel or stop. I removed 2 or 3 and the difference to my bank balance was more than noticeable.
Shop around. Think insurance, electricity, gas and the like. Providers tend to offer special rates to get you to switch, so if you move around regularly between competitors, you can keep your costs down permanently.
Set reminders in your calendar. If you get a better deal on something like insurance, it’ll usually only last for 12 months. So set a reminder in your phone or calendar to prompt you to shop around again next year.
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3. In a two income home, only spend the lesser income
For this, all you gotta do is exactly what is says on the tin; if you’re in a dual income household, do everything you can to cover the costs of your living expenses with one pay check. Then use the other entirely for savings.
Myself and my wifey started budgeting towards this goal last month. We’re not quite there yet, but already will be able to save half of one entire pay check (which is more than ever before).
We’ve lots of other budget busting brainwaves to move that up to our goal of saving one full paycheck, so we’re confident we’ll get there soon.
As well as having a ton of savings, living off just one pay check is a great way to prepare yourself for a day when one person needs to stay home full time.
Crunch the figures and make it happen.
4. Buy what you need, not what you want
Let’s break it down like this. If everyone had what they wanted, we’d probably be living in absolute chaos and our planet would be destroyed 3 times over. But if everyone had only what they needed, then we’d more than likely have solved world poverty and ended climate change.
Learning to distinguish between what you want and what you need can have just as dramatic an effect on your own life.
Unnecessary consumption leads to debt, debt leads to financial woes, financial woes lead to discontentment, and discontentment is the key element of unhappiness; therefore, unnecessary consumption equals unhappiness. The path is obvious, yet we ignore it. We choose to go through each day suffering with worry, anxiety, and fear so we can buy things we don’t need and often don’t even want.
It’s time to break the cycle.
“But I want it!” This is something you’d expect to hear from a cranky child right before they go into full tantrum mode. Yet most of us are guilty of the exact same mindset.
And there’s no rocket science here. We all have shit that we need in order to live. So everything else is want. Some wants are closer to the needs end of the spectrum, so the trick is to evaluate everything before spending.
Allow a ‘cool off’ period of 30 days before pulling the trigger on any significant purchases. This will give you time to reflect and research. It’ll also kill those dangerous impulse buys.
Word em up kid.
5. Kill the credit card
Do you really need a credit card? Doesn’t it cost more money and stress than it’s worth?
Now that my regular bank card is a Visa Debit I can no longer use the excuse of ‘I need my credit card to buy things online. And to book flights and stuff’. Bullshucks.
So I recently cleared my credit card. Then I took the BIG leap. I cancelled that mutherfucker.
Now I’m free from silly debt. Plus I don’t have to pay the annual government tax I was shelling out for the ‘privilege’ of owning that douchebag piece of plastic.
Since no longer owning one, I’ve realised that a credit card is really just a physical encouragement to buy things I kinda wanted but actually didn’t need.
Since killing it, I no longer want that crappy stuff to being with.
I make myself rich by making my wants few
– Thoreau (dropping some knowledge for y’all)
Can you kill your credit card?
6. Leverage the amazing power of cash
Carry cash not cards
Here’s some real talk for dat ass. It’s a hell of a lot easier to reach for your debit or credit card than it is to pull that hard earned cash money out of your wallet and hand it over to a grinning sales associate.
Dealing with real money helps you give real consideration to your purchases. You can only spend as much cash as you have, so you track what you’re spending in much more realistic way. On the other hand, the convenience of plastic makes it all too easy to go nuts and spend beyond your means.
So ditch the plastic, cash is where it’s at. Each week, withdraw in cash the amount of money you’ve budgeted to spend, and manage it wisely. When it’s gone, it’s gone – so be extra careful and smart in your approach.
Use cash envelopes
This is a great tip I picked up from the Living Lightly Podcast and it really helped me to become more intentional with the money I have. And in the spirit of minimalist living, it’s super simple.
Once you’ve finished your weekly or monthly budget, get a few envelopes. For each major area of expense you’ve budgeted for, take an envelope and write the name of that expense on the front.
You might end up with one envelope labelled ‘Food’, one labelled ‘Gas’, another called ‘Car’ and so on. Next, withdraw in cash the amount you’ve budgeted for each and stuff it in the relevant envelope.
It’s the same principle as carrying cash over cards – you can only spend what’s in each envelope and no more. Plus, you’ve physically removed the money from your bank account, so it can’t be blown on anything other than its intended purpose.
7. Create an emergency fund
Nothing will give you more peace of mind than knowing you have a small amount of money set aside for a rainy day.
Have you ever noticed that if you’re hungry but have no food, then all you can thing about is eating?
Well, the same is true of money. People with money, really don’t think about it all that much. But people who have no money, can’t think about anything else.
Create an emergency fund and aim to save about $500 in it. Once you hit this target, keep saving until you have around 3 months total living expenses squirrelled away.
The knowledge that you have some cash tucked away for an emergency will lift a weight off your shoulders and will free you up to focus your energy on other things.
What’s your take?
Do you have any money managing tips that can help others in their quest to embrace minimalist living and a simplified life? If so, get ’em in the comments now!
Til next time.