6 Financial benefits of minimalism

Minimalism is more than a trend; it’s a mindful way of life that can help you deal with money better.

6 Financial benefits of minimalism

Minimalism is all about recognising what’s the most important in your life and saying no to everything else. It’s about having less clutter and fewer distractions and increasing your mindfulness. Adopting a minimalist lifestyle not only helps your mental health and well-being but also helps boost your finances. 

Here are some ways in which minimalism can help you with your money behaviour and finances.

1. Avoiding impulse purchases

It’s only when you adopt minimalism that you’ll realise how much of what you buy is because of an ingrained pattern of constant shopping and conspicuous consumption. Feeling low? Why not buy that new phone? Have a party to attend? Surely this calls for a new dress! 

Minimalism will help refocus your priorities and remind you that splurging is not the answer to dealing with any problems in your life. It will reduce overspending, to begin with and will do away with impulse purchases over time. 

2. Recognising needs versus wants

When you start earning money and aren’t accountable to anyone, it’s easy to confuse needs and wants. That’s quite natural because it’s all very subjective to begin with. For instance, having a gym membership may be a need for someone because they take their fitness very seriously and work out regularly. For another, it may simply be a want because everyone has one. 

When you adopt the minimalist lifestyle, you’ll start being honest with yourself about your needs and what you can cut out entirely. Once you’re self-aware, your savings will increase significantly since you would have moved away from the consumption mindset.

Related: 7 Habits that stop you from building wealth

3. Valuing quality over quantity

Whether it’s work or social relationships, opting for quality over quantity is a universally beneficial rule. As a minimalist, you will start wanting to buy fewer things that may cost more in the short run but will last a long time and provide you significant value. For instance, instead of buying three pairs of shoes that cost around Rs 3,000 each, as a minimalist, you could buy one high-quality pair that costs Rs 7,000. This way, you save Rs 2,000 and derive a lot more value out of your purchase. Over time, this would also reduce storage expenses. Many minimalists also claim that they can make quicker career and personal choices in terms of moving to another city or state because they don't feel pressured by the stuff they own since it's little, to begin with. 

4. Shifting one’s mindset

Once you have adopted a minimalist lifestyle, you stop falling prey to consumerism. Since you can now differentiate between needs and wants and prioritise quality over quantity, there’s a shift in mindset from consumer to investor. This makes you invest only in things that provide you significant value and reject everything else. 

Additionally, with all the excess disposable income that you won’t be wasting on momentary fancies, you’ll be inclined to invest in assets that provide returns over a long time. For instance, instead of buying a designer bag, you may be more likely to invest in mutual funds. 

Related: 7 Money mindset shifts to adopt in 2020

5. Simplifying your finances

Tracking your expenses, and budgeting and paying bills, become a lot easier when you choose the minimalist lifestyle. Recurring expenses fall, impulse purchases are nipped in the bud, you think strategically and plan for every expenditure, and are more mindful of where your money goes and the kind of value it provides in return. 

6. Bringing focus to financial planning 

Usually, people are so fixated on what they want to buy next that all their money behaviour and motivation stems from wanting more. But minimalism changes that entirely and helps bring focus to your financial planning. When you’re not caught up with online sales or bargain shopping, you’ll be able to save and plan for bigger, more important goals – such as a foreign trip or buying your own home.

Last words

Adopting a minimalist lifestyle will benefit you in multiple ways, but it can be a challenge to get started. It’s important to discuss it with your partner and those you live with, since it can alter much of your spending behaviour. It’s going to take time and will be a gradual process. However, as with anything else that benefits you in the long term, commitment and resilience are key. Take these 5 minimalism challenges suited for every personality.

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