A Complete guide to financial minimalism

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Complete guide to achieve Financial minimalism
Complete guide to achieve Financial minimalism

Financial minimalism is about achieving financial freedom through being financially responsible, financially intentional and financially conscious.

But what does that mean exactly?

Financially responsible; means taking  responsibility for your financial situation.

Financially intentional; means decluttering your  finances and being intentional about  where your money is going at all times.

Financially conscious; means becoming consciously aware and maintaining that  awareness of your financial responsibility, and ability to change your own financial outcomes.

So in this guide to financial minimalism, I plan to share a hand full of ways that you can become more financially responsible, more financially intentional, and more financially conscious.

And always this conversation will be organized  in a way that’s easy to follow and learn. So if you’re looking to step up your game, and regain control of your life   and your money then this guide is for you. Let’s jump into it.

Financially responsible in financial minimalism

As I just mentioned this means taking responsibility for your financial situation. Now I purposefully chose to start this conversation here because

  • it’s where my wife and I both started in our journey, and
  • without this solid foundation, any sort of positive financial future you desire to build will crumble. before you even have the chance the lay the first brick.

How do we develop a strong foundation with financial responsibility?

Graphic explaining how to Achieve financial minimalism start with Becoming Financially Responsible
Achieve financial minimalism start with Becoming Financially Responsible

No.1 own your finances.

The first step to becoming financially responsible is taking responsibility. And to be Frank, it’s not going to be easy. Which is likely why many of us default to taking the easy route. We simply bury our heads in the sand, refusing to face our finances head-on, in hopes that the   darkness will somehow make the guilt, overwhelm,  frustration, and embarrassment fade away.

But news flash it doesn’t just fade away. We can’t just close our eyes on our own reality. Instead have to own our finances and acknowledge how and what needs to change.

No.2 Educate yourself.

Financial savvy is not something we’re born with, and our school system sadly doesn’t prioritize this important life skill. So we have to learn “how to manage money” on our own and share those learnings with our families and communities.

See, the more interest you take in learning financial responsibility, the less likely you are to develop bad habits that lead to financial struggle and ruin. Educating yourself is the best second, first step you can take hands down. And fortunately, there is a wealth of information available to you, through books, videos, podcasts, advisors and classes that can help expand your knowledge and raise your money management IQ.

No.3 Take action.

But take action towards what? I’m glad you asked. Take action towards getting out of debt. Towards getting on a budget. Towards saving   for your future. Towards learning how to control your spending habits. See if you’re going take the time to educate yourself, then you might as well apply what you’re learning. If not, not only are you wasting your time but you’re also stifling your growth—financially, mentally, and spiritually.

Without action, your financial situation will remain the same. Doubt about your future will begin to tarnish your mind,and you’ll eventually start to no  longer believe that you can change your situation—crunching your faith.

No.4 Stabilize your income.

In the last few Articles I posted, especially those on the topic of managing money, I took note of a hand full of comments that talked about not making enough money, or having a low income so I can’t save much, or the light-hearted comments about how your bank account is minimalist. And if that is you, then this tip is for you.

Stabilizing your income is about taking the necessary steps to have enough money coming in every month that affords you the pleasure of making financial progress and improving your skills in managing money.

So if your current situation isn’t as stable  as you would like or need it to be, then start thinking about skills you have or services you can  offer that can generate additional income for you. Additionally, ask yourself what can you bring to the table at your current job or any job   that’s worth them paying you more.

Regardless of what you do, remember that stability is key and you must have that financially because that’s the responsible thing to do.

No.5 Set financial goals.

As a quick refresher, in case you haven’t seen any of my previous articles. Your financial goals should break down into three categories. Short-term, mid-term, and long-term.

Now short-term goals are anything that you can accomplish, ideally, in one year or less. And this can be flexible depending on your goals  and how aggressive you’re able to attack them. For us, paying off debt and cash flowing our wedding we’re at the top of our short-term goals list. And we successfully accomplished both of them within this short window.

Mid-term goals should fall anywhere between 2 to 5years. And again this is flexible depending on your goals and strategies to accomplish them. So think about savings goals or a large purchase you’re interested in making. A down payment on your first home for example, or  renovations you want to make to your current home.

And lastly, long-term goals are anything beyond five years. So focus on investments and retirement and any additional income that can  support you long into the future.

Financially intentional in the Journey for Financial Minimalism

Where do we start and how do we achieve it? Well, first let’s remind ourselves about what this means—Financially intentional means   decluttering your finances and being intentional about where your money is going at all times. 

To simplify this even further, it’s decluttering and budgeting. Let’s break it down. Now I’d like to first highlight a couple of easy ways to help you declutter your finances. 

Graphic explaining how to Achieve financial minimalism start with Becoming Financially Intentional
Achieve financial minimalism , start with Becoming Financially Intentional

No.1 Create a debt payoff plan.

When you pay off debt, not only will you free up additional income which can be used for savings, retirement, and investments. But you’ll also begin to regain control of your finances, making you more financially responsible and intentional.

Now there are several ways to pay off debt. The most common being the debt snowball method and the avalanche method. However, no matter  which method you use, the goal is the same. Reduce the number the number of payments you have, thus simplifying your finances. you can check out our article how to payoff your debt even with low income.

No.2 Carry out subscription check-in.

Now I’m not saying that you can’t pay for things you enjoy, but for example,  ask yourself do you really need Netflix, Hulu, Disney plus, HBO max, Apple TV+, and Amazon Prime. Or can you live with just one of them? Again, the goal is to reduce the number, from the number of payments you have,  thus simplifying your finances.

No.3 Budgeting.

Similar to debt payoff methods, there are number of budgeting styles out there to choose from. For example, there’s line-item budgeting, proportional budgeting, pay yourself first, zero-sum budgeting, and the list goes on and on.

Now sure they each have their subtle differences  and pros and cons you can dig into if you really wanted to.

Although at the end of the day, it’s important to remember why you’re budgeting in the first place, regardless of what method you’re using. See budgeting doesn’t mean you’re broke, it means you’re wise. And in order to develop a strong foundation that’s rooted with wisdom, you  have to position yourself in a place that allows you to be in control of your money. And you do that through budgeting every month, consistently.

Financially conscious to achieve financial minimalism

As a reminder, this means becoming consciously aware and maintaining that awareness of your financial responsibility, and ability to change your own financial outcomes.

So how in the world do we do this? Well to answer that, I have four questions I want you to react to and respond to. You ready?

  1. Are you acting in your own best interest? Remember this is about taking  control of your life and your money.
  2. Do you have a fully-funded emergency fund? Are you prepared for the unexpected? Believe it or not, 69% of Americans have less than $1000 in total savings. And 34% of Americans don’t have any savings at all. Now those are pretty alarming  statistics don’t you think? That means more than half of Americans  cannot afford an unexpected $1000 emergency  without financing it.
  3. Are you confident in your own ability to handle money matters in your life? This is about reacting to and making wise decisions, with confidence, when necessary.
  4. Are you aware of how your action today will impact your financial future? Are you prepared to adjust your habits and make a shift in how you think in order to become financially conscious?

Here’s a final thought for you to take with you. Find balance. You see, we’re constantly comparing our lives with other people, and it creates unhealthy social pressure. So we curate our own lives based on the desires of others, and not on our own wants and needs.

Regaining control of your life and your money is about having the confidence to push back against traditional expectations if they don’t feel right for you and instead focusing on what’s important to you. I hope we shared something with you in this guide that you found valuable and helpful. Keep growing, keep learning and let’s share our knowledge of money with those in our community. Always stay true to you and  Don’t forget to follow our twitter .