Minimalism is a Powerful Tool to Reach Financial Security

But it’s hard to get started when you don’t have any money

To me minimalism is a beautiful concept. As someone who has adopted it I can tell you there is a progression to adopting it.

Here is the progression that I think most people follow.

1. Possessions

Initially when you first discover minimalism you apply it to your possessions.

You realize your wardrobe is overloaded and half or two-thirds of your stuff you have not used in over a year. So, you start throwing away clothes first and cleaning up your closet.

Then perhaps you move onto your garage, then your kitchen, and so on.

2. Your lifestyle

Many people stop here, but some will realize after throwing out most of what they own, they no longer need as big of a living space so will declutter their space with less furniture, then perhaps move somewhere smaller.

This can have so many positive effects. Less cleaning, less money being spent on your house.

Perhaps the ability to live in a more vibrant part of town since your requirements for square feet are now smaller.

Perhaps, you now swap out that car for a bike now that you are in this more walker friendly part of town now, which leads to no more car payment, insurance, taxes, gas etc. Further simplifying your life and improving your finances.

Perhaps, now that you have cutback on your possessions and lifestyle and your needs have been cutback so drastically you can make other major lifestyle changes now.

Like to your job perhaps. Always wanted to go after that career change. That is so much easier to do when you all the sudden need less income to fund your lifestyle.

But perhaps most beneficial at this stage you realize that not only have you decluttered your closet, and your home, and have started simplifying your life you realize the real benefit to all this minimalism stuff is on your mind.

3. Your mind

This is the stage where the real benefits start to come in.

Here you start to apply what you had to your possessions and lifestyle to your daily life.

First start out by simplifying your various inboxes. Maybe you unsubscribe, unfriend or un-connect to cutback on those various inboxes for e-mail, social media etc.

Maybe you go so far as to completely get rid of some of those inboxes in your life. Social Media perhaps? Delete YouTube, Reddit perhaps.

Then you move to your phone and start getting rid of apps. Then you move on to subscriptions. Do you really need Prime, Netflix, Hulu and Disney? Let’s get rid of some of those time sucks.

Now, with those gone, maybe you can stop being a consumer, and start becoming a creator.

Here is where the exponential improvement on your life starts to kick in.

But is this all just possible if you already have money?

Here is where the problem comes in. When you are barely scraping by financially it is hard to be a minimalist.

Back in my twenties, I moved across the country for the first time. I remember distinctly packing up everything I owned, putting it into a U-Haul and heading across country. I did not think about getting rid of anything. Ok, maybe a few obvious items that I was about to throw away anyway. But Minimalism, decluttering or anything like that was not even a concept in my mind at that point.

Why not? Well for one this was before the whole trend of minimalism really got started. But more importantly, it was because I was broke. And not just broke, but flat broke and in some serious debt. I was living paycheck to paycheck and worried about making rent every month.

This made the thought of throwing things away, unthinkable. Even if there was just the slightest potential that I would need an item in the future, why would I throw anything away, if I would need to buy it again. Even if it was years in the future?

This is the way that most people with uncertain financial circumstances think.

Which comes first minimalism or financial security?

Everyone these days is preaching the impact of minimalism on your financial life. And it is true. In that example above the U-Haul cost me a lot of money to drive across the country.

If I somehow could have just hopped on a plane with a couple of suitcases, I could have saved a bit.

And a few years later, in my thirties, when I ended up moving again. This time, clear across the world. A jump of twelve time zones where moving involved ships and crates and a lot more money. I skipped all of that, got rid of everything I owned and jumped on a plane with exactly two suitcases and my backpack.

The difference was I was much more financially secure at that point in life. I knew I could buy whatever I ended up needing and could get rid of my stuff.

Minimalism and financial security is a self-feeding cycle

If you have few possessions, and can live somewhere smaller, your buying less stuff, perhaps can do without a car etc. You are going to be better off financially.

Once, you are better off financially you feel safer living with fewer possessions because you know in a pinch you’ll be able to buy what ever you need. You feel safer living without a car because you know you will be able to rent a car if you end up needing one.

It’s a self-feeding cycle. The more you minimize, the more you save, the more you are able to minimize, the more you can save… and so on.

Use incrementalism to get into the cycle

Here is what I learned. All that stuff in that U-Haul on my first move? Well, less than five years later all that stuff was gone when I moved the second time.

So, I could have gotten started earlier simplifying my possessions, lifestyle, mind… it would have been scarier, it would have taken a bit of a leap of faith.

I look back know and I know I could have done it. I perhaps would have ended up throwing a new bed and some other things on a credit card but I could have done it. But that credit card charge would have been less than the one to the moving company.

But perhaps even back then, with my six figures of debt and entry level job, I was better off than some. At least I had a credit card and somewhere around $1K credit limit.

What if you have no credit? What if you have no emergency fund at all? It can be exceedingly difficult to get started.

But if you can. If you can start slowly. Perhaps start with just stopping buying new stuff, then perhaps see if you can cut back on eating out. Do that for a while until you have a little bit of money saved.

Then move on to the closet and your possessions once you feel you can afford to throw some things out. Then maybe change your living situation.

If you can do that, I believe most people could eventually get into that self-feeding cycle.

Then once your in the cycle you’ll find yourself reaching that point where your financial situation is improving pretty fast.

Finance professional with a passion for reading, writing, history, economics and the world.

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