I don’t consider myself particularly knowledgeable about personal finance. I keep myself and my wife’s finances simple both out of convenience and necessity. Spend less than we earn, use the rest to grow our wealth. Sounds easy right? Well minimalism helps keep it easy. Here’s how.
Effortless frugality. Frugality includes reducing waste, curbing costly habits and “reduction as an art form.” Goes hand in hand with minimalism, right? Frugality is an easy habit for me to maintain, because it consists of habits I’ve already set in motion with minimalism.
Smart shopping. Lots of people think being frugal means being cheap. Not at all! Being frugal means getting the most value for your money. That may mean spending twice as much on a new appliance purchase because it has been shown to last significantly longer than any alternative.
Fewer bills. We don’t have cable. Our last car was paid for with cash. We don’t have any outstanding credit card or consumer debt. Not only does fewer bills obviously equal more savings each month, it also means less time spent worrying about my finances in general.
Automatic bill-paying and savings. The bills we still do have are set up to be paid automatically by our bank, requiring only that I double-check the amount before they are sent. Similarly, savings is subtracted automatically. Not only does this grow our wealth automatically, it prevents that money from being frivolously spent elsewhere.
Easier budgeting. The views on budgeting are split. I fall into the track every penny of spending and every penny of income camp. I can see how this could become tremendously tedious for some people who routinely have dozens of transactions per day and dozens of bills each month. But for me it is a pretty quick and easy process. Less spending equals less budgetary work.
How else do you think that minimalism and personal finance work together?