Have you ever felt stagnant in your finances and on the other hand you find yourself trapped in a cycle of unnecessary purchases and expenses? I lived it without realizing it, until I discovered minimalism. Minimalism is the key to have fewer things, free up physical space, put order, clean up your personal finances and improve your quality of life.
In this post I will give you some reasons why minimalism helps you in your financial health.
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What does it mean to have healthy finances?
We start from the basis that To clean up your finances you must first analyze your economic situation. This is not cool at all but it is necessary for know where you are, what to improve and where to start.
In our finances, as in our lives, we should continuously analyze our financial situation in order to improve certain aspects.
That is why even if you have the habit of saving and have a budget, there is always something we can do to take it to the next level.
This series of tips will serve you whether you practice a minimalist lifestyle or just want to drink some tricks to clean up your finances and improve your accounts.
Mixing minimalism and finance is no coincidence. Let's say one thing leads to another. Wherever we start, either understand how we function as consumers, to save more or to live more simply. All these questions are steps that swing us from one topic to another continuously. Finance -minimalism, minimalism – finance.
It doesn't matter where you start, many times, the result is similar.
Reasons why minimalism can clean up your finances
So you can see what I'm talking about, I'll leave you some reasons to lead a simple life It can help you clean up your finances and have more organized accounts.
You become more aware of your expenses
Who has not felt remorse while giving away or donating a totally new item of clothing that cost a lot? Welcome
Well, that's where the gradual change that involves being aware that we often spend on things we don't need.
When you are aware of something you are able to remedy it and change it. That's where finances sneak in along with him -I'm not going to buy it because I don't need it-.
By simplifying your life you also simplify expenses and consolidate your savings
It is much easier to organize your monthly budget. You also have proof of the main expense items and can easily make decisions.
Organizing the expenses of a person who goes shopping every month is not the same as making a budget with simple day-to-day expenses. Accounting becomes easier to do when your habits are also easy to measure.
Don't buy things you don't need
Before buying something is better make sure that you are really going to use it or need it. For this We minimalists use a trial period in which if we do not think about that thing again or we can find a substitute for it, then it cannot be bought. As simple as that.
When it becomes a habit it is very easy to carry out. Saves you time, space and money.
Differences between good debt and bad debt
In the world there are nuances and in finance it is not very different.
There are a number of obligations what we acquired for our well-being and they give us something, good debt. Other times we take decisions, in the form of debt, in exchange for temporary satisfaction that does not improve our life at all, bad debt.
Good debt is one that helps you improve in your day to day while allowing you to cope with it without sacrificing basic areas of your life. It is also a debt with which you get more resources to pay for it or improvements in other aspects.
You are selective with your purchases
I've heard out there that minimalists don't buy. Everyone needs to consume to live. We start from the basis that It is one thing to buy what you need and another very different thing is that shopping is a hobby. There is the difference between a minimalist and a compulsive spender or consumer.
We minimalists have many hobbies, and none of them involves buying material or unnecessary things.
When you are selective with your purchases you can use that money and dedicate it to what you really like. It is not about not spending a single penny. It consists of investing it in something worthwhile.
Keys to clean up your finances with minimalism
Follow thisThese are the keys to keeping your accounts organized and optimizing your savings to the maximum. They are simple steps that help you follow uA series of guidelines to live calmer and invest the money saved in achieving your goals.
have a budget
Can be a monthly diary where you write down your income, expenses and savings. With these three games you have to start with the habit of recording your money movements.
Create piggy banks or savings folders within your bank to divide expenses and savings is a good option for Force yourself to save every month. It will be much easier for you to budget and It will only take you a few minutes to do the calculations for the whole month.
Create an emergency fund
It is often said that a good emergency fund is the one that covers your salary for 6 months. If this amount seems excessive to you, start with less. But keep in mind that the long term goal is to increase this fund until you can cover those 6 months or more of your salary.
Another technique is to calculate what you need to live and multiply it by the number of months that it seems sensible to have set aside. Example: you can earn €1200 but you only need €800 to live. That is, in your fund you should have €4800 (800 x 6).
What to do with your emergency fund? you can have it in cash in the current account or, better yet, in uNa account that some profitability and have few obstacles or requirements to remove it. Remember that it is money that must be available.
Savings: Start at the beginning
When You don't have the habit of saving every month It is nonsense to start talking about large figures or different items.
If your intention is to start saving and you are not used to doing so The best thing is to set an accessible goal and be constant until you meet it. This is how habits are created.
For example: you can propose to save 1000 euros for 3 months. Once you have it, set yourself another challenge and so on until you integrate saving into your routine.
Be thoughtful with your spending. I need it?
With the use of cards many times we realize little of the actual money we spend. It happens to all of us. Before we had to disburse the money, count it and deliver it. That had a psychological effect of real spending much more complex than the simple gesture of passing a plastic card through a device.
Our mind has not ceased to be like that of a child and in our subconscious still thinks that card money is a bit of a magic.
That's why you must keep a budget and reflect on the expenses you have every week, month, or year, depending on how you organize yourself.
Think reasonably about your expenses and if necessary Create games to group those of the same category. It will be easier for you to assess the weight that the different categories have in your finances.
Start investing part of your savings
Once we have something saved, it is time to start thinking about how we can optimize it. What they say out there -make your money work for you-.
To make your money profitable first I recommend inform yourself either with books on how to invest it intelligently or by taking courses on the type of investment you like. Choose the method that best suits your circumstances and way of being.
Alternatively talk directly to your bank and tell him that you want to invest part of your money in a fund. Try to understand as much as possible on the subject and once you have it clear, derive part of your savings to the investment section.
You can plan your savings and see the return on your investments in the long term using a compound interest calculator. Compound interest is a powerful financial tool that allows you to visualize your investments over time, in such a way that the interest generated accumulates causing the total amount to increase exponentially over time.
compound interest calculator It's super useful for setting financial goals, motivating you to save and invest.
Be generous
Economic wealth must go in tune with emotional wealth. You don't lose your balance.
Be generous, try to help others whenever possible. If you can, make small donations to an association or donate your clothes instead of selling them. Remember you can help in many ways.
Share what we have with other people makes us feel part of something much bigger and It makes us grow as people.
live simply
this is valid both for savings, work, family and anything you want to achieve in life. People are much happier the simpler we are.
Simplify your routines, have more time for you and your family, rearrange your house To create more spaces for peace, do what you like so much, surround yourself with people who love you and with whom you like to be. etc… They are small steps to simplify your life and have a more balanced life.
Remember that in such a chaotic world, the simplest thing is sometimes what brings us the most joy.
Books on minimalism and finance
I recommend some books on minimalism and finance. Practical tips to clean up your finances and save more money without too much effort.
- Finance for minimalists. andrea rodriguez
- I saved or never. The step-by-step guide to pay off your debts and save. Ivan Sanchez Luis
- Manage your money better with the steps of a minimalist budget. Eladio Olivo
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