Financial Minimalism: what is it, how to obtain started, and why utilize it?

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The first approach with the world of Personal Finance is often difficult. The word finance is intimidating and many find it difficult to take care of their money. However, in most cases, it is only a question of an incorrect assessment or excessively complex management, which unfortunately leads to disastrous and sometimes irreparable consequences throughout life. I decided to talk to you about Financial Minimalism intended both as an approach in which living with less is worth more and as an attempt to bring the management of our money back to greater simplicity.

Leonardo da Vinci said that: Simplicity is the ultimate sophistication.

Too often, however, we venture into winding paths or things greater than ourselves.

Especially when we start a new path we tend to load ourselves with useless trappings that weigh down our backpack.

In the financial sector, for example, we open too many accounts, we turn to consultants and attend expensive courses, we request a thousand papers and build a thousand files with the most absurd calculations.

We listen to all those who profess to be experts, we constantly change our minds and we want to immediately reach the highest possible competence.

In short, we often risk having too many stimuli, doing too many actions, forgetting the goal we set ourselves at the beginning of the journey.

The result is that unmotivated for not having achieved the goal we set ourselves, we change our goal or simply our tool, perpetuating our mistake.

Often what we need to have resulted in just a simpler approach, made up of repeated actions and gradual improvements over time.

Unfortunately, in the financial field, time matters, and acceleration has a limit anyway.

A good way to speed up the process is to live with less, giving due weight to material goods

This is why the search for financial independence by reducing expenses and maximizing savings capacity also falls within the scope of financial minimalism.

In this article

  • What is Minimalism?
  • What does it mean to be a Financial Minimalist?
  • Intentional purchase
  • Simplification of personal finances
  • How to start a path towards Financial Minimalism?
  • Why Choose Financial Minimalism?

What is Minimalism?

Minimalism is a concept born in the artistic field in which it is understood as essentiality.

It has entered the everyday language referring to a functional but very dry design, minimal precisely.

It has been transported in many areas and has also become the way to refer to a lifestyle in which one tends to appreciate simplicity, as opposed to rampant consumerism.

Today, being minimalist means having a wardrobe with few items, but suitable for every situation, and having a home with just the essentials, but still functional.

The concept of minimalism has also been brought into the financial sphere.

What does it mean to be a Financial Minimalist?

Minimalism in the financial sector comes in two different meanings:

  • Spend intentionally, buying only what gives us well-being;
  • Use few financial tools, minimizing financial complexity.

Intentional purchase

Minimalism does not coincide with frugality even if, reducing consumption, can lead to savings.

This approach concerns the minimization of the material goods on which you depend and not the saving in an absolute sense which is often the goal of those who choose a frugal style.

It does not, therefore, mean choosing what is cheapest, but spending only on what you need.

Simplification of personal finances

The second meaning of minimalism is to simplify the approach to Personal Finance.

As far as I’m concerned it’s the most interesting one.

I often help friends or readers in managing their finances, very often finding the need for Decluttering.

Decluttering is about the need to eliminate the superfluous.

Even in the management of Personal Finances, many are concerned about continuously following the innovations introduced.

Therefore, they do not fail to identify the new instrument that can guarantee stellar returns, they open a new account every month that offers 0.10% more interest or a particularly interesting bonus, they trade crypto today and commodities tomorrow.

This approach completely loses sight of the solid foundations on which our Finance management system should rest.

I must say that I too occasionally fall back into this mistake and complicate my existence excessively.

At regular intervals, I try to intervene by closing accounts and eliminating what does not add value to my finances.

Having a minimal approach to finance also means focusing on our goals by identifying a pre-established set of tools that can help us achieve them.

Personal finance is very simple and is based on income, expenses, savings, investments, returns, and time.

The tools should at least initially be simple to manage and very easy to understand.

When starting your finance journey it makes sense to focus on income and expenditure rather than investment.

In investments, we must never forget that time is our best ally and that each new operation adds costs to be paid to the financial intermediary.

As long as you are not familiar with financial instruments, it is not a crime to seek advice and perhaps choose an investment service such as those offered by Moneyfarm or Euclidea.

The important thing is to accumulate more and more money and be patient until you have the competence and time to manage your money.

How to start a path towards Financial Minimalism?

The path to Financial Minimalism is quite simple and begins by asking yourself what are the expenses and tools you need that bring value to your life.

It, therefore, starts with an effort to simplify and minimize what creates only background noise without giving any harmony to your path.

If you have small assets, does it make sense to over-optimize your money management?

Perhaps it would be more important to focus on earning more, spending less, and growing wealth.

Do you spend on what makes you feel good or what makes you better in the eyes of others?

Examine your monthly expenses and try to eliminate those that have not added any value to your life.

Why Choose Financial Minimalism?

I like a minimalist approach to Personal Finance.

It does not lead to frugality, an approach that I have never felt mine and which in most cases is an approach of deprivation and renunciation.

It also goes hand in hand with the attempt to rationalize, automate and simplify a money management process.

Simplifying does not mean reducing the returns on your portfolio, but focusing on what matters most at that moment without wasting energy.

Minimalism is a balanced approach which therefore allows efficient management which also gives a different meaning to money.

It transforms money into a means to intentionally and positively transform our lives.

I will therefore introduce some elements of minimalism to my money management by eliminating all that is superfluous and focusing on one goal at a time.

I am sure it will improve my outlook on life and also the management of my  insurance Finances.

How much do you see yourself in this choice?

Let me know in the comments.

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Alfred Williams, a distinguished business writer, navigates the corporate landscape with finesse. His articles offer invaluable insights into the dynamic world of business. Alfred's expertise shines, providing readers with a trustworthy guide through the complexities of modern commerce.