I recently wrote about the 10 (blatant) signs which slapped me across the face and told me I was in a financial rut (Read: “10 signs you’re in a financial rut”). It wasn’t as painful as it sounds but it is a time I will remember forever. I finally decided to actively participate in my financial future and claw my way out of this financial hole known as debt, changing my lifestyle and habits all at once. I found myself a new financial theme song, which eventually became the hero of my rut recovery – minimalism.
Up until this point, minimalism was such a foreign concept to me. I loved and needed all of the ‘things’ just to feel fulfilled in life. I know right, how bloody sad is that. I’m still not sure of the deeper, psychological reason but I’m sure it exists in all its subconscious glory. The point is, I had issues and that’s exactly why simplifying my life, my spending, my saving, my everything was going to be the answer to the change I so desperately needed. And it worked.
Financial minimalism became my new black, my new constant and it saved my financial future. I’m not shy about my minimalist life – just ask my husband with the hoarding gene – and would regularly cut, cull and destroy anything that resembled negativity in my life. Bad spending habits, things I don’t need, events that stress me out or my husband’s tax return (whoops) because I also hate clutter. Clean house, clean mind, right?
There are so many ways you can simplify your life and your finances, and sure, going vegan, cutting out plastic, quitting your job and moving to a remote village all fit the bill, but I’m referring to the more rational steps. The steps that anyone can incorporate into their life to change their messy and sometimes stressful financial life, into simplified perfection you could only dream about.
For me, minimalism goes beyond my bank account and has become a habit all unto itself. And because sharing is caring, here is how I used minimalism to simplify my life and my financial future…
Learning to live without ‘things’ – I used to be a classic impulse shopper and, on most occasions, would be surrounded by bags before I knew what had happened. Learning to live without things has forced me into having a sense of awareness I never had before. I worked hard for my money but would spend it so carelessly. Now, before each purchase I ask myself, “do I really need this, will it make my life better or easier?”. This questioning kept me accountable in the moment and helped to break the behaviours of the past. I am far more conscious of the moments I’m living and not the things I’m living with. You should try it sometime!
Learning to let go – I’m not a sentimental type of gal (I’m still trying to sell my wedding dress!), so learning to let go as a part of my minimalist practices wasn’t difficult. I try to sell those things I no longer need first, before donating to charity. This has turned out to be quite the money-maker and my initial sell-off made me around $1000, paying off some of my debt, clearing space and helping me become clutter-free. When you have less things, you need less space. Less space can also mean less rent money…(Read: “How I found my financial Feng Shui”)
Learning to prioritise my budget – I used to spend on anything that (I thought) enhanced my appearance – think waxing, hair, nails etc etc etc, or my chances of finding my one true love – think dinners, parties and endless nights out. Minimalism taught me to focus on my financial future and enjoying the simple pleasures, like going to the beach, going for a walk or sitting in a park with music, friends and cheese. Far more enjoyable and a heck load cheaper too!
I reverted to using my debit card for cash purchases only and cut up all credit cards. I critically asked myself what I need to survive, and you know what? Foxtel, fancy bath soaps and a fortnightly cleaner didn’t make the cut! I make Nespresso coffees and weekend brunches at home and keep my weekly food planning simple – I buy it all at the one market. More recently I have organised my budget so that I am paying bills at the same time each month and use Pocketbook App to track my spending.
Learning to live debt-free – In its simplest form, minimalism means less stuff. By spending less and saving more, you quickly find yourself in a position to pay off bad debt. What I thought would be a primary focus in my rut recovery, actually became self-resolving when I practiced minimalism. In fact, I paid it off a lot faster than I had projected. Bonus!
Learning to simplify my money – Like any addict in denial, I had a convoluted network of accounts, credit cards, superannuation accounts and loans. When I committed to a minimalist life, I stripped it all back. I consolidated all my debt into one account. At the time, this was rolling a car loan and three credit cards into one line of credit (a credit card), decreasing the limit each month I paid off an installment. I reduced my six bank accounts to two, one for savings (ING) and one for my everyday expenses (Westpac). I rolled my three super accounts into one and kept my financial life simple. Money in, money out.
Fearless Female Traders