Minimalist MONEY HABITS | 7 Ways To SIMPLIFY Your Finances

hey everyone and welcome back today we're going to be talking about seven practices that you can begin to implement in your life to help simplify your finances and apply that concept of minimalism to the way that you manage your money and i am all about taking a simple and uncomplicated approach when it comes to managing finances i love this quote by confucius that says life is simple but we insist on making it complicated that saying is applicable to so much of our lives but i think that it's especially true when it comes to our finances at the end of the day money isn't something that needs to be feared over complicated or revered it's a tool and we should treat it as such so today we're going to be looking at seven practices or ways that we can begin to integrate the idea of simplicity and minimalism into the way that we look at and manage our finances so i'm excited to get right into this if you haven't already be sure to hit that subscribe button below but now let's get into this with the first minimalist money habit and that is to spend with purpose and this one ties right into the minimalist lifestyle and it's essentially to spend your money with intention don't waste your money buying things that you don't like or won't use you need to ask yourself why am i thinking about purchasing this item you see there's nothing wrong with buying something that you love and genuinely are going to use but if you're buying something just to keep up appearances or because you feel like you should when realistically you don't love that item and it's probably just going to collect dust then that isn't a purposeful spending decision for you and i think that initial gut check really can help us weed out a lot of the unintentional purchasing decisions that we may make but for any purchasing decisions that you may still be on the fence about one really helpful way of framing this that i've found personally is to think about how much you make per hour and then to ask yourself is this item or this service worth x number of hours of work and you can fill in the blank there so that's just one additional filter that might be helpful for you as you're deciding whether or not a purchase is intentional for you or not but i think the real key here is just to think about your purchases rather than making them mindlessly and perhaps regretting them later let's move on now though to the second minimalist money habit and that's to track your spending and make adjustments as needed and i've talked before about the importance of budgets and having a plan for where your money is going but the first step before we ever begin to create a budget is to track our spending and know currently how we're spending our money so we can make the appropriate adjustments so to do this i would gather your last two to three months worth of bank statements and this would include your debit card statement your credit card statement and if you have multiple credit cards those as well and then you're going to go through a process of reviewing and analyzing them and specifically i want you to try to sort as many of these items as possible into three main categories the first category is eliminate how many of your expenses are realistically superfluous they don't necessarily add a lot of value to your life if you were to cut them out of your budget you wouldn't necessarily miss them the second category you're going to want to put things into is reduce can i cut back on the amount i'm spending in certain areas for example if you look at your statements and are surprised by how much you spend on groceries or restaurants you can look at those and say okay how can i reduce in these areas you definitely can't eliminate buying groceries altogether but often there's a lot we can do to be able to cut back on the amount for spending in areas like that and then the final category i want you to look at is automate are there any bills that you're currently having to pay manually every single month that you can instead automate so that you have one less thing to worry about by going through your expenses and lumping as much as possible into these three categories it can go a long ways towards simplifying your finances which in turn is going to make the process of creating a budget easier in the long run and then i've talked about this one a lot in the past so i'm not going to make it its own separate tip but i'll just tack it on to the end of this one but once you've tracked your finances get yourself a budget creating a budget that's simple but practical can go such a long ways towards really helping you to be intentional about your finances and have a plan for how you're going to spend your money let's continue though with the third habit and that is to not accumulate debt and in my opinion living within your means is such a huge part of what it means to live intentionally so the first step here is to pay off any debts that you currently have and trust me i do realize this one is much easier said than done paying off debt is never easy and it's often difficult but trust me on this one it is worth it and if that's where you're at right now and you're trying to pay off debt i would definitely recommend checking out dave ramsey's seven baby steps can be really helpful in giving you a process for getting out of debt and i know it's something that's helped thousands and thousands of people several of which i know personally so it can be a great resource if you're trying to become debt free but then once you are debt free the second aspect of this one is to make a plan for how you're going to continue living debt free going forward and there are a lot of different elements that can play into this whether that's sticking to a budget living within your means not owning a credit card or perhaps only owning one that you pay off each month building up an emergency fund there are a lot of different options available and some may be for you and others not as much but the key here is to make the idea of living debt-free a lifestyle and to think through what are the ingredients or the elements that you're going to need to incorporate into your life to be able to make that a reality and i just touched on this one but one huge ingredient not only of being able to live debt-free but also building financial freedom is to create an emergency fund and an emergency fund is essentially a set amount of money that you set aside specifically for rainy days but what it does is that it helps to create a buffer between you and life happening to you and having an emergency fund isn't going to prevent tough times from coming but what it does is it makes those difficult events that come up a little bit less stressful so if you're beginning your emergency fund from ground zero my suggestion would be to start off by trying to save up one thousand dollars and while that's definitely a lot of money with a bit of intentionality and hard work you might be surprised by how fast you can actually save up that amount and if you need some additional help getting there a couple ideas you can consider to earn that extra income are to cut your expenses wherever possible do some odd jobs in your neighborhood or in your community or perhaps even consider taking on an additional part-time job for a temporary amount of time until you've saved that emergency fund but then once you've saved up that initial 1000 you eventually want to work towards fully funding your emergency fund meaning that you're going to save up three to six months worth of expenses and obviously this isn't something that's going to happen overnight but it's a great long-term goal to work towards it's going to give you a lot of financial security and really help you take the next step towards building financial freedom for yourself the fifth minimalist money practice is to begin saving for retirement and a big part of being intentional with our money is not just about being intentional and having a plan for how we're going to spend our money now through budgeting but also it's important to look at how we want to save or invest our money for the future as well especially if you live in the united states social security income definitely isn't something that you can rely on long term so it's important that we begin planning now and investing for the future and so once you're debt-free one of the very next things that i would begin doing is as you're able to begin saving for retirement and there are a variety of different retirement savings accounts that you can invest your money into but a few that i particularly look into are 401k matches roth iras iras and 401ks and if you don't know exactly what those terms mean that's totally fine my suggestion would be to find a financial advisor who can help not only explain those to you but also help you pick the right types of account the big key here to remember when saving for retirement is that the sooner you begin to invest and save for the future the better off you'll be set when that future finally arrives and i love the advice that dave ramsey gives on this one and that's just try to save 15 of your take-home income and put that towards retirement and obviously that might be a more challenging goal to reach as you're earlier in your career but try working towards that number and you'll be surprised how much you can save and then next number six is to keep your investing simple and once you've created an emergency fund and you're beginning to save towards retirement you might begin looking at how you can invest your money over and above what you're putting towards your retirement and here my suggestion is to find a simple and streamlined solution that isn't going to carry with it tons and tons of risk even though there obviously is going to be some element of risk with investing but then also that it isn't going to take up tons and tons of time on your approach so on this one i would say to generally avoid day trading altogether and then unless you have a huge passion for investing to also avoid investing in and purchasing single stocks and not only is the risk naturally going to be higher with single stocks but the time investment on your part is also going to be a lot greater as well so for the sake of simplicity i find it a lot easier and more practical to stick to index funds mutual funds and etfs not only is this going to be a more hassle-free and simple way of investing but in addition to that top index funds do have a consistent tendency of outperforming the market and again like i mentioned definitely be sure to consult a financial advisor on all of this and then also just be prepared for fluctuations in the market if you're investing the stock market is naturally going to go up and down over time and just be prepared to weather those ups and downs finally let's wrap up with one of those fundamental but perhaps one of the most important minimalist money habits and that's to set goals and review them regularly and this quote that's commonly attributed to benjamin franklin has always been one of my favorites and it goes by failing to prepare you are preparing to fail and especially when it comes to our finances it is so essential that we have a plan that we can use to help guide our financial decisions and make sure that we're being intentional and mindful about how we're saving or spending the money that we have and so financial goals are something that i like to set on a monthly as well as on an annual basis i find that it's really helpful to have a larger goal that i'm working towards but then being able to divide it up into smaller chunks and this idea of setting goals and reviewing them is really something that you can apply wherever you're at in the practices and the habits that we've talked about today if you're trying to pay off debt make your goals around paying off that debt if you're wanting to invest you can make your goals around that as well you can really customize these goals and tailor them to your own situation but knowing what you're wanting to do with your money and having a plan for it really does allow us to use money as a tool instead of like we were talking about earlier over complicating it or viewing it as some kind of mystical thing instead of what it is a tool that can be used and leveraged by us to help us meet our goals all right guys well those are the seven money habits and practices that i wanted to share with you today i hope that they give you some inspiration to really take the idea of minimalism and really just of simplicity and apply it to your financial situation know that wherever you're at in this process whether you're paying off debt saving up an emergency fund or saving for the future i am cheering you on to reach your financial goals and really to be able to develop some financial freedom and really just a sense of peace and relief when it comes to your finances i know that for many finances can be a stressful topic so hopefully today you can leave with some ideas on ways that you might be able to really just apply simplicity to the way that you manage your money but now i want to know what is one way that you like to apply the idea of minimalism or of simplicity to your financial situation be sure to comment that down below and also if you enjoyed this video and haven't already be sure to hit that subscribe button below for more simple and intentional living videos coming at you twice a week and finally if you aren't already be sure to be following me on instagram i'm at ashland.eaton on there for more daily inspiration and updates so that is everything for today's video thank you guys all so so much for watching i love you all so much and i will see you in the next one bye

Channel: Ashlynne Eaton

Views: 93,747

Keywords: minimalism and saving money, minimalism and money, how to save money, minimalism, minimalist, finances, ways i save, money, with minimalism, ways to save, minimalist finances, personal finances, minimalist money ideas, stopped buying, budget tips, money tips, budget hacks, money hacks, simple living, slow living, declutter, decluttering, ashlynne eaton, charlotte nc

Id: ATbFP_A02II

Length: 13min 29sec (809 seconds)

Published: Fri Sep 11 2020