Here are 5 minimalist budget tips that have transformed our lives.
5 Minimalist Money Habits Video:
In this video, I share 5 minimalist budget habits and how we spend our money as a minimalist family.
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5 Minimalist Budget Tips
Having a minimalist budget should make your life easier. Simplifying our finances has made it easier to save and see where our money is going.
A minimalist budget is about getting more out of your money and using it for what you love.
If you want to know more about a minimalist budget then check out this book Minimalist Budget.
1- Direct Money to What is Important
If you want a minimalist budget then you are going to want to define what is important to you.
This will be different for everyone.
For our family travel, saving, and fixing up our home is very important right now.
These priorities might change over time, but figure out what you want now.
2 – Set Goals For a Minimalist Budget
Set some goals for your money. Don’t spend more than your income. This is very important and is the best way to avoid going into debt.
By having a goal for your money it will be easier to avoid regretful purchases.
Every purchase you avoid means more money is going towards your goal.
Some excellent goals are: buying a home, paying off debt, saving for a vacation, filling up an emergency fund, and the list goes on.
3 – Manage Budget
First, make a budget. Second, manage your budget. Lastly, reach your goals.
This sounds simple, but it is doable. Sometimes we try to avoid the reality of our money situation.
This is just putting off the inevitable.
Start by gathering all of your bills and figure out all of your monthly expenses. Now add up how much you make each month.
The goal is to make more than you spend. If this is not happening then it’s time to readjust your budget.
4 – Anticipate Unexpected Expenses
Unexpected things always come up! That is life. Make sure you have everything possible in place to cut down on these unexpected expenses.
For instance, get health insurance, life insurance, home insurance, car insurance. Even a little coverage can offset huge bills.
5 – Declutter Your Financial Life
For a true minimalist budget, our financial life must be simplified. If you have 10 different checking accounts THIS IS NOT SIMPLE LOL.
Declutter any unnecessary accounts or credit cards.
Everyone is different so you must do what works for you, but overcomplicating finances is a quick way to get overwhelmed.
One checking account, one savings account, 2 credit cards, 1 debit card, and some diversified investments.
We have simplified things further by setting up automatic payments. I even set up a monthly automatic payment to go into our savings.
This way I am not going to forget to save each month.
Our Minimalist Family Budget
A quick note on my personality: I am a natural saver!
My whole life I have always preferred saving instead of spending which makes getting ahead a lot easier.
We always buy second-hand cars and we bought a fixer-upper home. This way we can do all of the fixing up ourselves and we didn’t have to take out a larger loan.
Check out: Simple Ways to Save Money Each Month
Our minimalist budget goals right now are to:
Have a year’s worth of money in a savings account.
Regularly save into our long-term investments for retirement.
Spend the next year working and investing into our fixer-upper and then that money will be redirected into vacation funds or savings.
Our Budget System:
We use the 50/20/30 Rule.
50% of our income is spent on necessities.
20% goes into savings.
30% is spent on discretionary purchases.
Most of the time, since we are minimal, we have a lot of the discretionary money left over which gets redirected into savings.
This budget system has been working great for us!
Let me know in the comments what type of budget you prefer.
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