Many people avoid budgeting because of how restrictive it feels. If you are working long hours for your cash, you should never feel guilty about how you are spending it.
With that in mind, minimalist budgeting is a total game-changer. Instead of spending all your hard-earned cash on unnecessary items that you don’t truly care about, it can be put towards things that will actually give you pleasure.
- What Is a Minimalist Budget?
- Identify Your Financial Priorities
- Make a List of Your Monthly Expenses
- Eliminate Any Unnecessary Expenses
- Use The 50/30/20 Framework
- Simplify Your Accounts
- Automate Your Monthly Payments
- Find Ways to Pay Ahead
- Question Every Single Purchase
- Spend Less Than You Make
What Is a Minimalist Budget?
Minimalist budgeting is a great way to go about saving cash every month. In short, minimalism revolves around the idea of only owning things that are of the utmost importance and worth.
If you have ever met a minimalist, you would know that their lives are often very simple and fulfilling.
Minimalist budgeting can be so fulfilling because this technique is designed to save you money every month by limiting the number of unnecessary items that you purchase.
Instead of spending your money on every compulsive whim, minimalist budgeting requires you to only purchase items that are extremely important.
This way, you will save money and have more to spend on other items that will make you happy.
In other words, you will be limiting the non-essentials to make room for the goods that you truly value.
Identify Your Financial Priorities
The first thing that you will need to do when adopting a minimalist budget is identify which purchases take priority.
If you have a few things that you spend your money on every month, this process could take a while.
Also, discerning between items that are absolutely necessary and ones that you simply want can be difficult.
For this reason, asking somebody to help with the process may be a good idea. They will be able to offer an unbiased opinion when it comes to your expenditures.
What Do You Really Need?
During this process, you will frequently need to ask yourself if you truly need something.
If you hesitate to answer this question, it is usually a sign that you do not need it.
However, items like insurance, groceries, and other essentials will be easy to sort through.
Make a List of Your Monthly Expenses
Another vital step in adopting a minimalist budget is making a list of your current expenses.
This will also make it much easier to identify what your priorities are when it comes to spending money every month.
As a general rule, you should go back about six months to get a realistic idea of your expenditures.
After you have done this, you should be able to see exactly where the majority of your money goes.
Have a General Idea of Your Monthly Spending
Most people do not even know how much of their cash goes towards unnecessary expenses every month.
For example, many tend to spend hundreds, if not thousands, on fast food and eating out at restaurants.
This money could be saved every month, which would allow an additional portion of cash to go towards groceries, as well.
Eliminate Any Unnecessary Expenses
Once you have made a list of your monthly expenses and identified your financial priorities, you should go about eliminating any unnecessary costs.
If you have completed the previous two steps correctly, you should notice that there are a few areas in which you can save money.
Even the smallest of changes can end up saving you a lot of money at the end of the year.
For example, avoiding restaurants, unnecessary clothes shopping, and the theater can leave you with hundreds of dollars to spend on goods that truly matter to you.
The Quickest Way to Save You Money
In the long run, this is the quickest way to save money every month.
By eliminating unnecessary costs, you will realize just how much money you have been wasting on unimportant goods and services.
Also, you will notice that your life is no worse off without them.
Use the 50/30/20 Framework
One of the most confusing parts of adopting a new budget is knowing just how much money should go towards different expenses every month.
After all, there is no guide that tells you exactly what portion of your income should be spent on various goods and services.
With that being said, one popular framework that many minimalist budgeters use is the 50/30/20 framework. In short, this states that 50% of your income should go towards your needs. This includes housing, groceries, bills, and taxes.
Then, 30% of your budget should focus on wants, including entertainment and hobbies. Lastly, 20% of your income should be used on savings and debt.
This May Not Work for Everybody
It is important to note that no budget scheme works for every single person.
In other words, even though the 50/30/20 framework is popular, it may not be suited for you and your monthly expenses.
Simplify Your Accounts
Opening new accounts can seem like a daunting process. This is especially true considering that salespeople often try to get in your head and sell you the most expensive option out there.
If this happens or has happened to you, you should consider simplifying your accounts.
In other words, if you are paying for a premium option that offers various benefits, you could downgrade your account to a cheaper option.
This can end up saving you hundreds of dollars every month.
Do You Really Need It?
In this scenario, you need to ask yourself if you truly need what you are paying for.
Most of the time, you will not even know about or use the benefits that your premium account offers.
For this reason, you will simply be wasting your hard-earned money on unnecessary services every month.
Automate Your Monthly Payments
Most of us have plenty of monthly bills. For this reason, logging into various accounts to pay these expenses can be a huge burden.
Also, the odds are high that you will forget to pay certain bills every month.
To prevent this from happening, you can automate a few of your expenses.
Not only will this make your life a lot easier and less stressful, but it will also prevent you from thinking about money so often.
Avoid Thinking About Your Money
Money is the leading cause of stress and anxiety in today’s world.
If you find yourself caught up in this mindset, it is important that you take the necessary steps to avoid thinking about cash all the time.
For this reason, automating your monthly expenses can be a great option.
Find Ways to Pay Ahead
Another way that you can do this is by finding various ways to pay ahead when it comes to your monthly bills.
Most people simply pay for a month’s worth of services at the start of that month.
However, instead of doing this, you could pay for a few months’ worth of service and put that expense out of your mind for the time being.
There are a few ways in which you can gather the money to do this.
Mini loans are perfect for this process. These small loans are relatively easy to pay off and will save you plenty of stress every month.
They are also perfect if you have large expenses to pay off.
Question Every Single Purchase
To get the most out of your minimalist budgeting, you will need to question every purchase that you make.
For example, if you go shopping, do not simply buy every item of clothing that catches your eye.
Instead, ask yourself if you need it and whether or not it will make your daily life any better. If the answer is no, you should not spend your money on it.
In the long run, this cash could be put towards goods that will actually have meaning in your life.
Again, Do You Really Need It?
As we have already mentioned, the question ‘do I really need it?’ should be running through your mind every time you go out.
However, it is still important that you invest in your happiness and splurge every now and then.
Spend Less Than You Make
When it comes to saving money, you will need to spend less than you make.
If you cannot do this, you will eventually run out of cash and have nothing to show for your hard work at the end of the day.
There are various ways you can reduce your monthly expenses. The steps mentioned above should help you achieve this goal very quickly.
However, it is vital that you stick to minimalist budgeting to experience all the benefits that come with it.
The Only Way to Save Money
The only way you can save money is by spending less than you make.
If you do this for a long time, you will end up with plenty of money to put towards your goals and aspirations.
For example, if traveling is your passion, the money that you have saved over the months can go towards planning a once-in-a-lifetime trip.
Minimalist budgeting can save you thousands of dollars a month. To achieve this, you will need to identify your priorities when it comes to your monthly expenses.
Also, you will have to eliminate any unnecessary costs and simplify your accounts. You can also find ways to pay ahead when it comes to your monthly bills.