5 Minimalist Habits To Achieve Financial Freedom

It’s impossible to ignore the financial benefits of decluttering, downsizing, and owning less. For our family, financial freedom was the single greatest gift we experienced when we chose to own less and pursue a minimalist lifestyle. 

Our path to minimalism began when our son was young. Over time, we’ve sought to set an example by teaching the importance of debt-free living, owning less, and being intentional with our resources, especially money. These are character traits we hope he’ll inherit from our example.

Debt-Free Living

The process began with a personal finance class my husband and I took together. I was motivated to declutter anything that wasn’t nailed down in our house and never buy anything ever again. Meanwhile, he was motivated to accelerate our retirement savings and reduce our spending in several areas. This led us to realize that step one was to eliminate every penny of consumer debt we had. We cut up our credit cards, closed a $45,000 home equity line of credit, and lived on a budget that allowed us to pay off everything except our mortgage — and eventually start attacking our mortgage, too.

The more work we did, the easier it was to see the connection between less stuff and more financial freedom. And we found that paying close attention to our spending and reducing the amount of stuff we owned was not just life changing but legacy changing. This meant we could create financial security and establish habits that our son would learn and a legacy that would outlive us.

When I think about how we met these goals and improved our financial wellness, these are the five habits we practice every day.

1. Stop Shopping

The best way to reign in your finances and get organized is to stop shopping. Without fail, this is the first piece of advice to apply because it works. If you reduce your spending and stop the inflow of stuff, it opens up time and space to declutter and get organized while adding money to your bank account.

Take it a step further and commit to a shopping moratorium. Pick a category where you’re overspending and stop buying for a specific period of time. No more Starbucks until the credit cards are paid off. No shoe shopping for 6 months. Limit grocery shopping for 2 weeks and eat only what you have. Boundaries and constraints like this are helpful. They create financial discipline to spend wisely and save more. Boundaries also restore order to your physical home.

2. Make Coffee At Home

Research from Empower shows that many people are still committed to spending $7 a day on coffee or $2,520 annually. Takeout conveniences can add up quickly without a plan.

I gave up my Starbucks run. Instead, I started making really good coffee at home and it is a significant cost savings. Also, it’s a habit-stacking element of my morning routine. I turn on the tea kettle, grind the beans, unload the dishwasher, and plan my day over a cup of coffee at home. 

3. Create A Meal Plan

Every week, I make a meal plan based on our existing food inventory in the fridge, freezer, and pantry. With a meal plan, it is easier to resist the ease and expense of ordering take-out or going out to dinner. And the grocery list is shorter, which saves money and reduces waste. Items purchased in bulk can yield a cost savings unless they expire or go bad before you have the chance to use them. This is where a plan makes all the difference.

4. Build And Track A Budget 

Write down your budget before you start spending. Decide how to allocate your monthly income. If you have no idea how to set a budget, run a report from your bank account. This is a great starting point. Most banks offer budgeting tools that show expenses by category and a summary by month. It’s eye-opening to run a report and review just the last 6 months. I know you might hate budgeting but if my 17-year-old can do it, so can you. Closely monitor the categories where you know you overspend. Groceries, dining out, subscriptions, shopping apps, and spending at big-box stores like Target, and Costco are the usual suspects. These categories are all good options for a shopping moratorium.

5. Borrow, Repurpose, Or Do Without

Before you add an item to your in-person or online shopping cart, press pause, and reconsider the purchase for at least 24 hours.

• Discuss it with your spouse.
• Do we need this item?
• Did we budget for it?
• Can we borrow it from someone?
• Would a repurposed item solve this problem?

Financial freedom and owning fewer items are inextricably linked.  If you want to get organized, look at not just how much you earn but how much stuff you have. When you lack financial discipline, the disorganization continues. Don’t let clutter cost you time and money.