It can be a scary dealing with debt, and minimalism may be one avenue to freeing yourself from it. You may have heard of minimalism. Maybe you even know a minimalist. But what exactly is the practice of minimalism, and how can it help you?
Minimalists point to less stress, more freedom and a clear mind as the primary benefits of the lifestyle, but could minimalism actually improve your personal finances? It’s worth a closer look.
What is Minimalism?
The definition of minimalism varies from one practitioner to the next, but generally, minimalism is a lifestyle that stresses simplicity. This increasingly popular lifestyle discourages the collection of material possessions. In most cases, minimalists shed these possessions in an effort to gain physical and mental freedom.
Minimalism and Money
It’s important to note that minimalism doesn’t discourage making money. It asks only that money is not your primary motivation.
If you have a job you love, rest assured that you can hold on to your hard-earned money and be a minimalist. While there are stories of dedicated minimalists dropping everything and starting over, we recommend you keep showing up to work for now.
Debt and Minimalism
There are few tools more effective than cutting your spending to get you out of debt, and minimalism can help get you there. Minimalism, with its focus on eliminating material possessions, can have a significant effect on your personal finances, such as getting you out of debt. Minimalists maintain that if you’re practicing consistently, you could see positive effects on both your short-term and long-term financial health.
Sell Your Junk: If you have closets full of junk (or treasure) that you no longer use or need, sell it online or hold a garage sale. It can be difficult to part ways with some of your possessions, but perhaps getting rid of your high school art project or that lamp that never made it out of the box will relieve some stress. And maybe more importantly, it could put some extra cash in your pocket that can be used to pay down your debt.
Create a Budget: Creating a budget is a time-tested habit for increasing simplicity’s close relative: efficiency. A budget will allow you to take stock of where you’re spending your money. You can then decide which items are absolutely necessary (food and rent) and which items can be cut (cable and gym membership). You can now redirect that savings to paying off debt or making a big purchase that really means something to you.
Get Time Back: You may not realize it, but your possessions might be owning you instead of the other way around. When we make a purchase, we commit to investing time, energy, and money into that purchase. Those investments can pile up. Minimalists recommend zeroing in on your true passions and ditching costly distractions. This will not only give you some of your life back, but also pad your checking account.
Increase Salary: Use that extra time for self-improvement, including adding to your professional skillset. Investing time in your craft could lead to advancing in your career and increasing your salary. Once you’ve secured a raise, live on your previous salary, and contribute the rest to your savings or debt payments.
Consolidate Debt: As you consolidate your possessions, it’s only fitting that you should also consolidate your debt. Debt consolidation in the form of a personal loan allows you to combine your debts into one convenient payment every month. Debt consolidation can reduce financial clutter.
The minimalism lifestyle can be a tool for getting out of debt, but we understand it’s not a one-size-fits-all strategy. If you’re interested in lightening your load, perhaps it’s time to give minimalism a try.
If not, that’s OK too. There are a number of effective strategies to get out of debt and minimalism is just one of them. At the end of the day, it’s about finding what works for your lifestyle and capitalizing on your plan.