Minimalist thinking to saving money.
Minimalism living has many advantages, for me one of the most attractive ones is the increased ability to saving money.There are a lot of ways and approaches to save cash and all is dependent upon a few things like – the area you live, your everyday expenditure, how much you earn, how you were brought up, how big your family is etc. I would like to point out I do not know your personal situation, so I cannot say whether what you read here will help you. As always, I suggest you get independent advice from a qualified professional who can look at your personal and current situation and tailor a plan for you. We understand that finances and money can be a sensitive topic, this can be due to some earning more than others.Some can save easier and more than others.Just like with everything we are all different.
Before we get stuck into this lets talk about minimalism and discretionary income, or as we call it at The Academy your Net Investable Income. Firstly, the term minimalist comes with many misconceptions about it and some people think that they cannot be a minimalist on account that they will have to deprive themselves or surround themselves with only a few objects. That’s not the true definition of minimalism, not in its entirety and not when it comes to saving our dollars. Minimalism is having, and living with, things that provide value and have motive in my/your existence and eliminating the rest. It can be really that easy, it’s not problematic, and you certainly do not need to deprive yourself. Deprivation of something only leads to failure, in my opinion.We just become fixated on what we cannot have, and then want it even more even if it serves no great purpose.
So just quickly, I want to touch back on Net Investable Income (discretionary Income), this is the money you have left over after income tax and your everyday expenses have been taken out. It’s what you have left to use and decide upon whether to save it, spend it, or invest it. What you do with it is purely your choice (it is at your discretion). For example, you might put it towards retirement, into your wealth account, into a savings account or into an emergency account. Or you may choose to use it in your everyday life, like going out for dinner and drinks with friends or family, buy shoes, clothes, hand bags and so on. In the past, we would spend quite a lot of our leftover income on these things. These were the days before implementing wealth accounts, don’t ask accounts, utilising our Net Investable Income to work more for us. But that was ok, it was at our discretion and it was before we educated ourselves on better money habits and minimising spending. This was when we discovered a better way, learnt about money rules and how to use them to be better spenders and minimising purchases.
Minimalism has helped me, and my family, to spend way less money over time.I want to explain how effective it is to move away from an ordinary everyday consumer attitude to a more minimalistic mindset. There is a basic success secret to saving money that minimalism allows us to see and implement.That basic secret is that minimalist living makes us a conscious consumer. Let me explain what I mean by that.
Now the basic formula we use to save is not new at all, we all know we need to spend less than were making Money outgoing needs to be less than Money incoming (Income > Expenses). If that is done, then we automatically end up saving. The fact that we all know this, I acknowledge that its not always this easy to do. There are many factors involved, inside and outside our immediate life, that are influencing this balance, ensuring we spend more than we want to, or more than we even realise. Now what are those factors?Lets take a look.
Our society is getting more and more chaotic. Every day we are just bombarded with noise, white noise.There are ads everywhere, subliminal at times but they are there.They are encouraging consumerism, get the latest and greatest thing. Don’t be left behind, you have to keep up if you want to succeed.Things are not good enough as they are right now, but they will be if we buy this product, this gadget, this latest and greatest.
For curiosity sake, lets look at a scenario.Mobile phones, the latest and greatest one yet has just come out.The ads are showing all the features of the new phone and look it is so shiny..Woohoo!!But hold on, I already have the same one its the older, not so shiny version, however, I’m tempted to buy the brand new one, because shiny! It does this, this and this better. Earlier mindset would have been ‘I want the brand new, latest and greatest mobile, my old one isn’t the best one anymore, it has a scratch on it too – I have the money left over this month so I might as well spend it’. There are a few issues when it comes to mobile phones and the massive FOMO consumerism behind always wanting the latest models. One there truly is a waste mentality there. We buy, we discard, we buy, we discard and so on.But the most troubling factor is the impact we have on our environment. But honestly, that is a whole new article. Back to mindset, in this scenario now, my new minimalist mindset is ‘seriously, there is nothing wrong with the phone I have now. It works perfectly, it currently satisfies all that I need it to do. I will keep it until I NEED a new one!. And this all happened last year. I refrained from getting the latest model, even though I really wanted it. Then earlier this year, my old phone was broken beyond repair, so I ended up getting the latest model. This process can be made simpler, and more streamlined when you implement Money Rules into your life.To find out more on Money Rules, check out our earlier blogs.
And its not just ads. Its also the messages sent through social media to each other, both directly and indirectly. We see all the stuff that other people have, what they’re doing, where they are, and the keeping up with the Joneses has entered the digital world. Actually, perhaps worse still, it is not just the Joneses some want to keep up with, now its Keeping up with the Kardashians, which for most is completely impossible. Its harder to not want what the Joneses (or Kardashians) have or are doing.We don’t want to miss out!! It makes us want to keep up and avoid FOMO. FOMO at its ugly best!
Ok, I am getting a bit carried away here.Let me wrap this up.
Becoming a Minimalist can be quite daunting.Being a minimalist does not mean you have to deprive yourself of things.We all know, in a lot of cases, what we deprive ourselves of, we want even more.Like when we are on a diet, don’t eat the cake, don’t eat the cakeI want cake, I am craving cake. But just one slice, then whole cake later. DOH! It is just a better way of saving money and not being wasteful. Stop and think before you purchase. Work out what is truly important to you. What are your goals, is this purchase going to take you closer or further away from achieving it.Money Rules, well it sure does! But are you ruling it or is it ruling you. Get clear and concise Money Rules to ensure you are purchasing, or investing in, what will serve you greater. Remember the number one money ruleSpend less than you earn! Avoid trying to keep up with the Joneses or the Kardashians, and living beyond your means.
Ok, I will say it one last time and quite simply, stop and think through each purchase.
It may seem annoying to do so, but, coupled with solid Money Rules you will be
doing it in a flash before you know it.
It really will become a quick thought process.