Do you believe less is more? For many things in life, I would agree. In fact, I would say less is often better! With that in mind, here are 5 ways minimalism saves you money!
Before we start, just what exactly is minimalism? Often called “simple living”, minimalism is choosing to live with less in order to maximize things you value the most.
Thus, minimalism is different for each person and there exists of spectrum of ranging from extreme to moderate forms.
I myself am I minimalist. I live the minimalist lifestyle with a minimalist home (which I posted pictures here).
Plus, I know a thing or two on how minimalism saves you money.
I save over half of my working income each month thanks to living within my means and buy consuming less stuff. I post my monthly expenses every month as well as compare those expenses to my passive income.
So, here we go!
5 Ways Minimalism Saves You Money
1. Less Stuff
Minimalism is often seen as the opposite of consumerism. The average American household had an average of $5,221 in credit card debt in 2022 (nearly $850 billion in total US credit card debt).
Most of that comes from buying too much stuff. Worst of all, buying too much stuff on credit cards as interest rates are rising. That’s a double whammy!
This isn’t to say you shouldn’t buy stuff. There is no rule in minimalism that says you can’t buy nice things. Heck, I like and buy nice things too at times.
However, there is a line you cross when too much stuff becomes detrimental to your financial well-being.
Do you really need a TV for each room, even though you rarely watch TV? Do you need to buy that brand new blender endorsed by your favorite celebrity, even though you know you will never use it?
What about that new Jaguar on the commercial? The Jones’s bought one, I need one too (even though I am still paying off my first 2 vehicles)! Oh, and those stylish $200 Nike sneakers, I got to have to those!
It gets out of control and for most people, that means sacrificing financial well-being for stuff.
One of the benefits of adopting a minimalist mindset is that you will to become a smarter shopper and learn quality is better than quantity! You will also develop the skill to not buy things you don’t need.
You can save thousands of dollars (or more) per year just by cutting down on buying stuff you don’t need. Buying more and more stuff will not provide you with long-term happiness. Not in the way financial freedom can.
Simply learning to live with less, thus buying less, will save you money.
2. Less Spending on Clothing
Many people do tend to accumulate more clothes than they will probably even wear. Often, clothes not worn anymore will get the back of the draw, closet, or a pile on the floor.
Over the past 5 years, I have discarded and rebuilt a wardrobe a couple of times. When I did so, I had a minimalist mindset in place. In a previous post, I talked about how to build a minimalist wardrobe.
The average American family spends about $1,800 per year on clothing. The average person (age 25-34) spends $161 per month on clothing.
By adopting a more minimalist wardrobe, you will be able to save hundreds of dollars per year on clothing expenses.
Furthermore, if you limit your clothes to what you need instead of every article of clothing you could potentially wear, you will save a pretty penny.
This doesn’t mean you can’t have nice clothes. I bought nice clothes (in my opinion). It is a matter of quality and smart shopping. As often the case, quality is better than quantity.
3. Lower Housing Costs
Whether you are buying a house or renting an apartment, probably the largest expense nearly everyone is going to have is housing costs.
The median price of a home in the US, as of 2022, is $408,100 and the average rent payment was $1,877 per month, as of 2021. Bare in mind, these are averages, the numbers will change widely depending on your location.
When you adopt minimalism and you don’t have that much stuff, you need less space. Therefore, you can downsize to a less expensive home. Also, if you’re looking to move out on your own, you can consider renting a room or a studio apartment with low rent payments.
Again, you should not sacrifice quality. Moving into a bad neighborhood to save money on housing is never a good idea.
For myself, I moved into a studio apartment 5 years ago. I pay $614 per month in rent. My housing costs are only a fraction of my working income. In a previous post, I talk about the benefits of owning a studio apartment.
4. Lower Energy Bills
Probably one of the forgotten financial benefits of minimalism is lower energy usage, thus lower energy bills.
For example, when you have a television plugged in in every room, lights on throughout your house, and appliances plugged running all over, your electric bills are going to be high.
A house uses far more electricity than a studio apartment. And the larger the house the more energy will be consumed.
The average electric bill for residential customers in the United States for 2020 was $117.46 per month.
My electric bill for 9 out of the 12 months of the year falls between $32-35 per month. The only times my electric bill approaches the national average is during the summer time when I have the air-conditioner on more. Other than that, my electric bills are quite small.
5. Less Debt
The less debt you have to pay means the more money you can save! In the United States, American consumer debt increased to $15.31 trillion in 2021!
A minimalist lifestyle is indeed the antidote to this epidemic of debt. Purchasing smaller dwellings means a lower mortgage payment, not owning multiple vehicles means less auto loans, and buying less stuff means less credit card debt.
Calculate how much you pay each month paying off debt. Now imagine life without such debt. Pull back, consume less, and free yourself from the chains of debt!
I am happily debt free. In fact, I have never even owned a credit card. All the money I don’t lose paying off debt, is money to be saved and invested.
Conclusion
And there are 5 ways minimalism saves you money!
As an added bonus, minimalism will also help you develop financial discipline. You will learn to take your long-terms plans into consideration when making purchases and disregard things you don’t need.
The value of quality over quantity will slowly become instilled in your mind. You will eliminate your debt and your financial life will improve.
As to what to do with the money you save? Why not put it to work for you?
I invest the money I save into dividend growth stocks.
Over the past 5 years, I’ve built a six-figure portfolio that generates a yearly average of over $1,000 per month in dividend income!
That is passive income that I earn while I sleep. Passive income is the key to financial freedom!
That is what I did, but you may choose another path altogether.
Happy savings! Also, don’t forget to subscribe for more great content and updates! 😀
So, what do you think of this post? Do you consider yourself a minimalist? Also, do you have any other ways of saving money? Let me know in the comments below!
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