A Step-by-Step Guide to Achieve Financial Minimalism | Live Life More and Spend Less to become a Financial Minimalist-NewsWiseStories
A Step-by-Step Guide to Achieve Financial Minimalism | Live Life More and Spend Less to become a Financial Minimalist
Table of Contents:
- What is Minimalist or Minimalist meaning
- What is the Concept of Minimalism
- What is Financial Minimalism
- Financial Minimalist
- Steps or Ways to achieve Financial Minimalism
- Conclusion
What is Minimalist or Minimalist meaning?
Minimalism is a lifestyle change in relation to eliminating excess, thought process of living with less and being mindful of the materials or liabilities ownership, reduction of non-essential or useless elements and finding essence in simplicity.
It encourages individuals to focus on what truly matters to them, track expenses regularly and lead a more meaningful life.
Minimalism also in Art or Design conveys a message of being simple, balanced with unnecessary ornamentation and yet creative.
Minimalism meaning in Hindi is : न्यूनतमवाद
This is the lifestyle being adopted by many people all over the world now-a-days.
What is the Concept of Minimalism?
The major concept of minimalism is "Less is More", meaning avoiding unnecessary and live life with elegance.
It is actually not mandatory to be living with less but still live your life more. But, it is more of a choice which you choose to use or purchase the most essential items or materials in your life. It does not mean that you don't have money to buy, rather being a financial sound person, you choose only to buy necessary and essential items mindfully even though you could buy more expensive items. And moreover this is a commitment to yourself to consume or use only what you need which eventually becomes your habit. In our ancient days or traditions, it was always told that live your life with minimum material things, cause you are not going to take away anything after death.
Today I am going to give you some information, which not only try to change your way of life but also will try to change your way of thinking towards life. Since, we are focusing more on Financial Minimalism or how to become a Financial Minimalist, let do a deep dive on that.
What is Financial Minimalism?
It is a mindset actually. This does not mean that you live your life in below means always or live life with less always but it means you will live your life with how much you need with right intent. This is a mindset or a point that you have already reached and you know how much you have is enough for you for your life.
Let's understand, who is a Financial Minimalist.
Financial Minimalist:
This is that person who :
1. Does not have any Debt at all or many debt at all
2. Does not do a lot of expenses, and mostly no unnecessary expenses
3. The income of that person is quite higher side than his expenses
4. Regularly does the investments. By even considering of the situation when he might run of of savings or income
5. Don't depend on anyone for money for any wishes or expenses
6. He knows the value of money and there is a goal of saving money
And with that much of money he can do anything with which he finds happiness.
No need to run for money, not to show anyone, not to defeat anyone. Only live life for your own happiness and terms or families's happiness and still have enough money left for the future.
Now think of that person having all these points can be surely called as a financial minimalist, and think of his mindset.
Don't you think this is a fantastic and brilliant life to be living. But how do we get there? What do we need to do?
Steps or Ways to achieve Financial Minimalism:
Awareness and adoption of this lifestyle fetch you a lot of benefits.
there are some steps we are going to discuss to move towards the Financial minimalism world:
1. Declutter your Finances:
Let's say you entered you house, and you saw all your things in the house are scattered and cluttered everywhere. So what will be your state of mind? You won't be able to focus in one right which one to start with first to rearrange the house again.
Imagine the same with your finances. You have so many credit cards and the credit card expenses, so many bills to pay, so many investments, insurances, so many types of expenses, so many incomes, some loans etc...
So you need to really start from here where to keep everything. When you do that, you will everything in front of your eye so that you can track them easily and even about your family members also. With this you will have your productivity increased and your mind will be in peace. When you have a peaceful mind, you will have new ideas to do things differently and also to do different things.
2. Budgeting your Money:
There are so many people in the world who have no idea where their money is going or spent. Some are also there who don't know or track where their money is coming from and where it is spent.
Don't do that mistake.
Give respect to your money, so that your money will respect you..
Let's understand a simple rule to start and maintain with:
Assume you get 10000 as salary every month (after Tax, PF, other deductions) in hand from your regular income. Out of this value, you will spend max 50% as your expenses meaning 5000 in our case in this example. These expenses would be for the needs like House Rent, Electricity, Mobile Bill, Water Bill, Grocery, personal loan EMI etc.. to fulfil your lively hood or daily expenses..
Next, you spend 30% of your income in "Wants", which means 3000 in our case. Obviously we need a good life to maintain. We cannot be living in misery in present and would be only saving for future. Then, what is the need of that money in our old age, when we would not be having that strength to live live fully.
Your wants can be like buying good cloths, mobile phone, laptop, or partying, laptop etc.. And you make sure you do these things from your 30% of income.
Finally, you spend 20% of you income for investments. This could be for your bigger goals like children's marriage, buying a house, retirement etc... And obviously Insurance. This is must.
Two Insurances I always recommend.
1. Term Life Insurance:
This is a low cost and pure life insurance, which protects you for life and your family member for the unprecedented loss (death or critical illness etc.). You can add some more riders also like accident cover etc.. Without having this insurance, can put your loved ones life in misery. Minimum recommendation is till 58-60 years age or your retirement age.
2. Health Insurance:
This will always help you when there is any hospitalisation costs or expenses due to any disease. Without having this insurance can wipe out your entire savings, even though you do any kind of investments smartly.
Also have a separate health insurance for yourself or family members in addition to the company's Health Insurance, cause when you leave your company, your health insurance will be null and void from that day for you. If you don't want to take it earlier, at least have some emergency money to buy it immediately when you leave your company.
Also make separate health insurances for your family and your parents, because parents are getting old, then premium becomes higher if you are included with them.
4. Regularly Track your Expenses:
So many subscriptions are there like Prime, Netflix, Jio, Sony Liv, HotStar etc... You may have been forgotten one subscription, so it would automatically have debited money from your account or credit card. If you don't track, you may not be able to stop subscriptions in time if you wish also. Similar case if Credit cards, you may forget the due dates and finally you may end up becoming a defaulter and pay high interest charges. Even you may find many unreasonable expenses go towards useless loans, like car loan, personal loan, TV loan, Fridge Loan etc..
When you track your expenses, you will get to know many things about those. Probably you may want to stop a few expenses or you might feel some are unnecessary.
After all these, don't regret in your late age by thinking that I wish I would not have run behind money. I wish I would have lived my life better.
"Don't let your money to dominate you.."
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So, when you will proceed towards financial minimalism, you should spend your money in creating memories like:
- Spend money on travel to explore different places or world.
- Try different cuisines or foods.
- Spend money on knowledge or education
- Spend money on fitness or sports
so on...
5. Make a Delay for your Expenses
When you delay for some expenses, you will get to know whether you should take that or you should not. Possibly you may not want that anymore, so you will be barred in spending that money in this useless expenses.
With this I would say that you live your life fully without showing the status to other in respect to money, and give respect to the money or value you have and be happy.
Conclusion:
When your life is in your hands (mostly to a large extent) then your confidence also increases and clarity starts coming in life.
This lifestyle also gives you the right to choose right decisions in your life out of many decisions to do the expenses only on the basis of their needs.
However, this does not mean that you should not go on trips and tours, because it is also important for your mental health and you should plan accordingly. Finally proceed in the path of minimalism..
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Happy Investing !!! 🙏🙏🙏
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