This will change your relationship with money forever
Many people will give us financial advice from our friends to our families to random people on the internet, but what if most of what you have heard is wrong and there’s a different way to live life?
Minimalism has become popular because of all the amazing benefits it can give to your personal life but today I wanted to look at those same principles of minimalism and apply those to our financial life and how you can really get an insane amount of freedom and completely turn your life around within a few years just from looking at these principles and really getting spending under control earning more and then learning how to invest and how you can take that to, completely transform your life.
Discover your why?
So usually when people start minimalism it’s because something happened in their life maybe it was a tragedy or maybe they just got to the point where they decided I want to have less clutter around my life something’s not right I need to make some drastic changes in order to improve my life and usually it’s the same thing with your financial situation you’ll get to the point where you’re saying I don’t want to work till I’m 65.
I don’t want to give the best part of every single day of my life to earn money and then never have enough of it, I really need to make some changes.
So I think the first step is understanding your ‘why’ understanding why you need to make a change whether you want to have more time with your family you just want to work less you want to take back control over your life you want to be able to travel more what is you remain why and that will make a huge impact as we go to the other rules have a strong and simple plan a wise man once said that if you don’t know where you’re trying to go how will you know when you get there so I think it’s important to have a simple plan of where you’re trying to go so you can’t just say I want to have a better life
I want to have more money that’s not really a goal you need to decide what your actual goal is so you can figure out the steps to get to that goal so let’s say you want to be out of your job you don’t like in the next three years well to do that what are you going to need to change like how much money are you going to need to be out of that job for instance when it was me for my job
I said if I can get my expenses down to $2,000 a month and then I can buy two rental properties and that will earn me $2,000 a month then I’ll have all my living expenses covered and I could leave my day job and I can just do side hustles and things that I’m interested in and that’ll make up whatever difference that I need and I think pretty much anybody in the world can do that within you know three to five years you can get your expenses low enough and then your passive income high enough the real estate investing to leave your job
Now that’s not for everybody
For some of you want to start a business or need to invest in the stock market or whatever your plan is but you need to have a plan to get your expenses down, so you don’t need as much money to survive on that way you’re able to leave your job sooner or whatever your goals are for you I think just having that overarching goal and then breaking down the steps is a great way to get there.
I am happier now
I’m having less stuff and I had too much stuff. I’m slowly working on getting it down but I think decluttering your finances is also just as important and has just as many benefits so when you’re trying to declutter your finances you want to go through your budget and your expenses your last bill from your credit card and look at every line item and ask does this bring joy and value to me and that’s not just the things that the lattes the shirts and all that stuff which is an important look at and say you know should
I have spent as much money on Amazon all those things are important they add up but you also have to look at the big items and your housing payment your car payment and realize if I didn’t have this car payment and I found out a different way you know to get a car cheaper could I work one day less a week and have that much more freedom in my life would that bring me a lot of joy and value or could I leave my job you know five years earlier if I didn’t have this or if I had a smaller house, could I work one more last day a week you know because that’s a thousand dollars between the two of them right there.
if you go from a $1,500 payment to a thousand dollar payment and you get rid of your $500 a month car payment because you know got the cash you got an older car something like that if you’re able to get all your expenses down, then you have so much more freedom you have the money to invest you have the money to save up and have that security in case you know the world shuts down
you have all those same benefits of having less stress having more freedom having you know the things you spend money on you really feel good about and you don’t feel guilty about them anymore if you want to go extreme this try closing your bank account or closing your credit cards and then only start things back up again when you realize that is essential and that it’s super important or to going to bring you like a ton of value so maybe you have gym memberships and all these subscriptions these different things and you and you cancel your credit cards and now they all stop you’re going to realize really quickly which ones
hey I was using Netflix every single day, and, and I was getting a ton of value out of that you know I like that I had fun with the family with it I’m going to get Netflix again but you know what I just realized that I never listened
My Spotify premium in my audible this and you know like all those other things my gym membership I haven’t used it in six months all those different things and you realize what’s super important by cutting everything and then only going back on the things that really add a lot of value to you so that’s just something that I’ve done a few different times and I would highly recommend it really helps
This will change your relationship with money and every time you spend you will think a little differently and you’ll ask that question is this worth five dollars of freedom is this worth ten dollars or hundred dollars or a thousand dollars of my freedom and if not you don’t spend on it so not only are you looking at will this clutter up my home does this bring me joy and value but you’re also asking does this bring me enough value that I can sacrifice a little of my freedom for
if you want to be one of those people able to retire in their 20s or 30s or at least leave their job and do something that they love kind of like what I’ve done almost has nothing to do with how much money you’re making it really comes down to how much money that you’re spending if you can get your spending down to that $2,000 a month range and you can figure out a way to make $2,000 a month possibly which anybody can do in three to five years then at that point you’ve reached financial freedom pretty much and you’ve taken back your life you’ve taken back your time you can do whatever fulfills you and whatever you enjoy and whatever brings value to other people make a simple, straightforward system
I’m sure I’m not the first person who’s gone through and decluttered a ton of stuff in their house and then a week later maybe two weeks maybe the next day things get out of hand again in your back where you started and the solution I’ve found for that is to have a system and have a place for everything
so that way things don’t get on the car and they don’t get left around if everything has a place and there’s a system where you don’t just throw your mail on the table where it goes in its own slot and everything is systematized it makes things a lot simplers after you set up that system it makes everything kind of go on autopilot after that you have to do the same thing with your financial life where you’re creating systems you’re creating a budget you’re creating rules for yourself maybe it’s choosing a budgeting method maybe you’re just using Mint the app
I used to use that or maybe you’re just using a pad of paper or an excel sheet depending on what works for you and every month you look through your last month of spending and maybe you realize a lot of things that you’ve spent money on didn’t really have any lasting joy any lasting value and you look at that for the future and you try to cut those out never cut out coffee it could just be as simple as setting up things on auto pace that everything is automated you never miss a payment you never accrue that interest if you have a tendency to miss your mortgage payment or your credit card payment or any of those
you just set them up on auto pay creating as many systems possible to make things as easy as possible to save as much money as possible can really make a huge impact spend money freely on things that bring you value it’s also just as important to decide the things that do bring you that value and are worth spending money on what things really bring you happiness or even if it’s donating money what what you think really is gonna make an impact deciding on what those are and then not feeling guilty about spending money on those things this is something that
I struggle with where I can do pretty good about cutting down my expenses and saving money as much as possible but when it comes to spending on myself it’s something that I have a hard time doing even though I think it’s really really important to spend money on things that bring you joy things that bring you value now there’s a lot of things that you can do for free that can really make you happy and bring you joy as well but there are some things where money can buy experiences and I think it’s really good to build up those memories build up experiences
find ways to travel and to spend time with others as much as going out and spending twenty dollars on a meal and a drink is a waste of money when you could have gotten that same stuff for five dollars every once in awhile it’s worth it to go out and spend that money if you’re gaining a really good experience with your friends or family have a growth mindset most minimalists not only want to better themselves by having less stuff and if it won’t really make much difference that’s why most people when they win the lottery they’re broke within a couple of years because they never changed their mindset they had more money