When you simplify your life, you can focus on the things that matter most to you. This will also help improve your personal finance! I talked about this earlier in the series (Take Control of Your Money), but it's worth revisiting again. You deserve the best, but do you know what it takes to get there?
It starts with simplifying your choices. You may think that buying more will make you happier or improve your life in some way, but we're here to tell ya- not so much! Simplify and buy less, and let's see how long these changes take before they have a positive effect and improve personal finance situations…
You deserve the best. Every person deserves to have a great life and be able to feel proud of themselves for all they do each day. Sometimes, though, it can feel like you're stuck in a rut no matter what you try – that's where simplifying comes in!
Define Your Personal Finance Goals
The first thing you need to do is take inventory. Make a list of everything that you spend, where your money goes and what percentage it takes up in the budget. This includes mortgage or rent payments, car loans and insurance costs, groceries, gas for your car(s), utility bills (electricity/gas/water), etc. The best way to avoid overspending or forgetting about something important is by knowing exactly how much you have available each month.
**If you're married or in a relationship, talk to your spouse or partner about what's important and how you want to improve your financial situation- is it saving more, spending less? Once you set goals together, the action steps will be much clearer.
Next, you need to figure out what your priorities are. You may have a wish list of things that you want like a new car or an expensive vacation – but it's important not to set yourself up for disappointment by focusing on those wants too heavily. Focus instead on the needs and start brainstorming ways in which these can be met as well.
Especially if you're not sure where your money is going, it's important to define your goals to improve personal finance. You might want to spend less or save more, but to achieve either of these things is knowing what they are!
When you approach your finances through a minimalist lens, you’ll be forced to examine what really matters to you. You'll really dig deep to find out what's important to you, financially. Perhaps you're close to retirement and you want to enjoy it, so you'll make changes to help facilitate that. Or, perhaps you're just starting out and want to be as frugal as possible while enjoying life.
To begin the process of identifying your priorities and values, make a list. Ask yourself what kinds of things and experiences are most valuable to you. Chances are good that material goods won’t top your list. You'll realize you don't need that top of the line TV or that just released phone. For instance, just today I made changes to my phone plan which will save me money and still offer me the same coverage as before. This frees up finances for other things like my vacation this summer.
Next, it's time for an honest examination whether or not current spending habits align with those choices–if something is important but never gets purchased because there isn't enough money in the budget then chances are high that frustration will follow!
You'll want to revisit your list regularly, because priorities change as our lives change. Your priorities as a 20-something are different than your priorities as a 40-something. Revisiting your list helps you keep your personal finance goals on track.
You’ll Become Less Dependent on Possessions
What have you done with your life? You’ve been a slave to the consumer, slaving away for all these material goods. It doesn't make sense that possessions would bring happiness if they can be lost or broken so easily. They're just one more thing in an already cluttered home and garage full of junk! It's hard to feel content when you're surrounded by impulse buys.
Retail Therapy can be a way for people to project an image of success but there is nothing harmless about it. In fact, sometimes the act of buying things only exacerbates depression and other mental illnesses because our minds are not always in control
Many people rely on buying things as a means to prove they're doing well or maintain appearances when really retail therapy isn't without its consequences. For some individuals with depression etc., this escape from problems often only makes them feel worse than before which leads back into the cycle and knocks you off the track to improve personal finance goals.
Associate purchases with a specific goal that aligns with your goals in order to stay aligned! This will help you stay disciplined and to reiterate your personal finance goals.
You’ll Save Money
It's simple: shopping just isn't worth it. Once you curb your spending, not only will the money from those purchases be gone for good – but so are all of the memories and experiences that accompany them. It would make more sense to spend that cash on something like travel or education because at least then when life passes by in a blur someday down the road, you'll have some great new stories to share with others! The best memories don't come from material things, they come from experiences!
There are a lot of things you can do for free, and there's no need to be afraid to try them. You'll always have something new on your bucket list that will bring with it an adventure worth more than money could ever buy! And when the time comes where saving dollars is necessary? There are plenty of ways to cut back and improve your personal finance goals in the process.
What is the best way to improve your personal finances? That's for you to decide. What are some simple ways to make ends meet during tough financial times? It would be wise not to spend any money, but that might not be possible in a lot of cases.
You’ll Be Less Pressured by the Joneses
It's easy to fall into a trap of comparing yourself and your lifestyle with others when you're constantly surrounded by material things. But, this comparison is also unhealthy because it can make you feel like there are always some expectations or standards that need to be met in order for you to compare favorably. The reality is, we all have different values and priorities that don't always match up with what the Joneses do or buy. Your spending choices should align with your priorities, not someone else's.
Plan to Improve Personal Finance
Once you learn to align your spending with what matters most, it'll be much easier for you to feel content and relieved. Focusing on what is really important and removing the impluse buys and unnecessary items from home or life can really ease your stress and help you bring happiness to your life. It will also change the way you evaluate possible expenses in the future, build an emergency fund or put more into your retirement account. All of this enables you to improve personal finance situations and reach those goals! that you're aiming for.
Hopefully, you now have motivation to begin to craft your own minimalist spending plan. What expense were you surprised about as you made your list? Which expenses do you want to find ways to cut?
Tell me your successes, too! Did you find a way to cut the cord (cable) or save on your auto insurance?