Minimalism and money are two things that go hand-in-hand.
And while you might think that the notion of having fewer things, or maintaining more simplicity in your life has little to do with the way you manage your cash – you’d be wrong.
In fact, minimalism has everything to do with money. Minimalism is about the re-evaluation of priorities.
It’s about understanding our internal motivators, what brings us joy – and of course, what doesn’t – and cultivating spaces around us (physical, digital and psychological) that are conducive to a life more full of shiny feelings instead of shiny things.
As humans, we have very precious and finite energy stores, yet we spend so much of it on keeping up appearances. We reach for conveniences because we’re too time-poor to even have time to think about how time-poor we are, and we’re so used to being bombarded with products, subscriptions and offers that oftentimes we don’t even notice we’re being lured in until we’re within the predatory grasp of the sale.
This all comes at a major cost. Not just to our health and ability for self-awareness, which I truly believe erodes over time with too much clutter and overwhelm – but to our financial wellbeing. People think it’s expensive to be a minimalist. I think it’s expensive not to be one.
For many years, I have lived a life that is fundamentally minimalist, both in how I keep “earthly possessions” in the physical world around me, but also how I view situations and problems, treat others and prioritise things that matter to me. The benefit of this on my wallet has been enormous, so here’s how I apply minimalism to my everyday:
I don’t buy what I don’t need. Genuinely.
As in, I rarely buy material things ever – and when I do, I go through a rigorous thought process beforehand. Do I need this? Will it solve a long-term need? Is there something I already own that could do the job? Could I rent, or borrow this instead? Will it hold, or even grow in value (should I choose to sell it later on)? Rarely do things I want to purchase tick all of those boxes, and so I can filter through a lot of ‘nice-to-haves’ in order to find what I really do need.
Intentional spending gives you breathing room to properly, and fully, evaluate. It exercises your brain to think critically about things it is programmed through predatory advertising to normally have no say in, and affords you the benefit of time and purpose to help you conserve your money for things that are worth the exchange. That makes them all the more worthwhile when they come around.
I reuse and find other uses for the same item.
Many items are, by design, multipurpose. We just often don’t believe, or see it.
Certain oils are great for the hair, skin and for cooking. A myriad of cleaning products and laundry detergent can be created from simple soap bars and white vinegar. Jars can be used as storage and then pulled out for decoration later on. Toothpaste is good for everything from dental hygiene to burns to jewellery cleaners.
When you see the potential for second lives for your items, you negate the need to have something specialised for every purpose.
This clears space but also keeps your bank account looking pretty full, especially when you consider how brands typically markup niche product ranges. And when you couple this with being less wasteful, like bringing your own jars, bags and pouches when shopping, you’ll see just how damn expensive, and limiting, packaging can be.
I keep things simple online as much as offline.
My digital life is as simple as my physical one. Everything is neatly collated and categorised, and the second I’m finished with something, there’s no archive or memory bank – into the bin it goes. I love holding onto memories, but if I’m honest with myself, I find more solace in feelings instead of things.
I’ve realised that if my nature is to archive something away, then the likelihood of seeing it again before at least another year or two is very low. And besides the fleeting chuckle of looking at a physical photo of a day in my life I cherish, there’s not much else that happens other than I put it back away. So, for files I really love, I keep them in a single cloud folder on my Drive, but mostly, I don’t keep a hold of anything but money.
As someone who used to work in the media, I like to stay informed and aware. But when there are hundreds of companies vying for my attention with their updates, I’ve learnt not to feel guilty about subscribing only to a select few media platforms I know and trust. This is the same with entertainment.
There’s something very satisfying about having clarity and direction in what you allow to burn through brain cells every day. It’s kind of like sitting on a bridge on a highway, watching the clouds move when all the cars are frantically speeding on the lanes underneath and around you.
And while some of these things cost, because we absolutely should be paying for ethical, impartial journalism, and really good entertainment, what I get is way more valuable than any subscription fee. I’m afforded the luxury of staying present and in-the-know without the constant, mind-numbing noise of literally everything else I don’t care about, but that I’d undoubtedly be ground down to spend on.
I throw complexity out the window when managing money.
People sometimes say to me a little sheepishly “I only have a few bank accounts where I store my money.”
Well, that’s a couple more than I have. I don’t believe that there’s a complex formula to saving your money; at least not one I know anything about. I have a personal banking account for everyday transactions, a business account for anything related to my business (which makes tax time a dream), a bonus interest rate savings account for anything that’s not applied to the portion of our primary home loan that’s set up as an offset, and a credit card.
Managing my money day-to-day is simple, because why make it hard – and hard to remember? I pay my regular cost of living, business and maintenance bills, I shelve 70% into savings and investments (through separate investment accounts) and I live on the rest. I carry cash very infrequently, because I like having my money where I can see it, and I don’t have complicated insurance structures set up. They’re simple, run-of-the-mill things because that’s all I need. Money management should be habitual and repeatable; with the same actions happening over and over every month. It’s the only place mundanity will help you thrive, whether it’s saving up or paying debt down. Make it muscle memory.
I keep a simple investment portfolio.
Much like my daily money management processes, my investments tick along just as simply. I pick investments that I understand and don’t require me to be very hands on – because at this stage in my life, I can’t be.
Property is one that requires a lot of upfront work, but significantly evens out, minus the occasional maintenance job, and shares – particularly the kind we like, ETF’s and LIC’s – are all bought, traded and managed online, with easy reporting when we want a clear overview of how our holdings are performing. We set up reinvesting automatically upon purchasing new shares because that’s extra work we can take off of our shoulders, and we don’t need to draw our investments as income right now.
Superannuation is managed from the one account (if you’ve got multiple accounts – combine, combine!) and I contribute concessionally to the tax-deductible cap (which is $25,000 for people who are self-employed). This is a regular part of my savings schedule every month.
Because we are long-term investors interested in growth (two-dimensional investments that grow in value and pay out income), rather than defensive assets (just paying out income, like the high-interest savings account above, which earns interest on the base amount deposited), the simplicity around our investments helps us to stay on top of it and make contributing habitual.
Maybe later, I’ll look into seed investing in startups and real estate investment trusts (REITS), but right now, we’re only interested in things we can easily manage and keep an eye on. Applying minimalism to the stage of life we’re at when it comes to our investments helps us to stay focused and make it a priority.
If it all became a bit too overwhelming, we’d probably sit back and stop, which would mean we’d be missing out on investings’ most important moneymaker: time.
Ultimately, we’re hardwired to feel a lot of guilt and fear for missing out. We want all the things. All the content. All the knowledge. All the experiences. But what we forget is that a lot of that stuff doesn’t even apply to us, and it certainly doesn’t fulfil us. It drains our energy as much as our wallet. In a way, this makes us compliant and easier to persuade – moving us further away from what we really want.
Going through the process of streamlining and cutting out crap is one of the most powerful things you can do for your finances. Looking after your money by looking after your time, and guarding your surroundings, is so easily forgotten – but so easy to put back in place.