In recent years, the minimalism trend has exploded in popularity across the United States, particularly among Millennials. Minimalism has inspired tons of people to declutter, downsize their possessions and live with less. Along with helping you save time and declutter, adopting a minimalist mindset may also help to free up your life financially. The same minimalist practices used to organize your living space can apply to your personal finances as well, informing how you spend, save, borrow and manage money. Here's are a few ways that minimalism can help you simplify your financial life and potentially save money.
Clear out the clutter
One of the first ways to start applying minimalism to your life is by decluttering your living space. Start by going through your closets and removing anything that doesn't add value or happiness. Then, tackle the process of decluttering the rest of your living space. You might be surprised at the number of items you own that you no longer use! Clearing out the clutter is not only good for your closet, but it can also be good for your wallet. You can always sell unwanted items online or hold a garage sale to earn some extra cash. If an item isn't selling after a while, donate it to a local charity, where it will be given a second life by someone else.
Organize your budget
Practicing minimalism can help you create a monthly budget that's simple and easy to follow. Start by tracking your expenses and figuring out how your money is used each month. Are you spending too much on things that don't add much value to your life? For example, maybe you're still paying for monthly subscription services or memberships that you no longer need or use. Once you have a better idea of your spending patterns, use a spreadsheet, notebook or even a smartphone app to create a budget that aligns with your financial goals. Keeping everything organized in one place will help you track your goals and ensure your bills are paid on time each month. Setting up a household budget doesn't need to be tedious or time-consuming either. For extra budgeting help, use one of Wright-Patt Credit Union's premade budgeting worksheets. You can also use Money Management, a free service available through WPCU's Mobile and Online Banking.
Plan your spending wisely
Minimalism is all about limiting the items you own and only surrounding yourself with belongings that you really need. This mindset can help you avoid the temptation of making budget-busting impulse purchases. Minimalism requires you to plan your spending wisely and carefully reflect on how you will use an item before purchasing it. As you become pickier about your purchases, you will likely spend less and have more money to put toward financial goals such as building up your emergency savings or paying down debt.
Get your credit in order
The minimalist trend may also inspire you to clean up your credit. Your credit score is one of the most important factors lenders consider in determining whether or not to approve you for loans. It's wise to keep an eye on your credit score and take steps to ensure it remains healthy, such as continuing to pay bills on time and maintaining low credit card balances.
Another way to simplify your credit is by using just one credit card. Using one card will make it easier to track your expenses and reduce the number of bill payments you make each month. You might also consider consolidating and refinancing multiple loans, including student loans or auto loans. When you refinance and combine multiple loans into one lower-rate loan, you will save money and enjoy the simplicity of having a single loan payment to make each month.
These are just a few of the many ways that living a minimalist lifestyle can help you simplify your financial life and save money.
For more ways to Save Better, Borrow Smarter and Learn a Lot about your finances, check out some of our helpful online tools or register for one of our upcoming Financial Education Seminars.