There’s a certain beauty to simplicity. Freedom of choice is great, but sometimes too many options can become overbearing and make life difficult. Especially when it adds to financial worry. And, the countercultural movement known as – minimalism, has begun to gain ground in recent years. People in jeans and black T-shirts. You’ve seen them. Whether on YouTube or the street, they’re around.
These individuals believe that by owning less, we promote those things that are of true value, and removing all unwanted distractions in the process. As a by-product, we fully experience life and grow as people.
Sounds great. But what also sounds terrific is how adopting this lifestyle can impact your financial well-being. A survey by the American Psychological Association showed that money is the number one cause of stress in America, with 77% of people feeling anxiety about finances. Relieving some of that worry seems like something that’s more than welcomed.
But how does minimalism help, exactly?
Little to No Debt
Going by an Experian 2019 Debt Study, the average personal debt for Americans stands at a whopping $90,460. With more than 80% of Americans being in some sort of debt. And, the more troubling thing is that as people age, they get further into it, starting in their early 20s.
Minimalists, sans a formal college education, which costs around $45,000 for a private college, mitigate expenses in all kinds of different ways. They do not own homes unless they’ve inherited one. They rent small, they don’t use credit cards, and they sell whatever they don’t find essential. So, they simplify their finances to get out of debt and to stay out. If you’re facing this issue, it’s best to research tips of how to payoff debt fast and apply what you learn. Because despite popular opinion, there’s no such thing as good debt.
You often hear minimalists say that their way of life is not about deprivation, but about intentionality. Treating yourself to a nice meal at a restaurant is great, and should be done once in a while, but it’s not essential. People in the US, on average, spend $2,000-$3,000 per year on dining out, depending on their state. Add to this the $9,000 they spend on their vehicles, and it becomes obvious how all these things add up, and debt piles on.
Instead of asking questions such as – do I want it? Or – can I afford it? Maybe it’s wiser to question – what kind of value does this add to my life? Do I need to own a car? What will change in my life if I take the bus, eat at home, or don’t buy that jacket? Minimalism makes you question what you’re giving up and what you gain from something before spending money on it. So, the true priorities rise to the top.
Little Surprise Expenses
A little planning goes a long way. When you budget and stick to what you’ve written down, there are little unwanted surprises to be found. Though, life throws the occasional curveball. Proper organization is a top priority for any minimalist, and all expenses are planned and researched ahead of time.
This is especially crucial in this day and age as the average millennial net worth at age 25 is -$23,704, and consumer spending is on the rise, with young people buying expensive electronics and clothes. Restraining yourself, and limiting to what you need, can be a gratifying process in of itself, one that’s bound to pay a dividend, later on.
More Tax Money Back
Sadly, the government doesn’t reward those that choose to live modestly, with the average tax refund in the US being slightly above $2,800. Which isn’t too bad, all things considered. However, if you don’t have too many expenses and little to no debt, then you have more money to give, and the government does cut charitable individuals some slack.
When you have a good handle on your finances, and free time, then you are truly free and can focus on giving back. Whether by way of money or by giving your time for a good cause. Both are worthwhile and will feel good.