Minimalism isn’t just about having one pair of quality shoes and a hairbrush as your worldly possessions.
(Though sometimes that’s exactly what it is about).
Rather, it’s the practice of taking the time to consider the importance and relevance of your decisions.
Many fabulous, whirlwind type folk often reject minimalism outright because they love colour, overflowing closets, and scribbling in the margins, and associate that kind of maximalism with their character, which is delightful and doesn’t need to change.
That is very fair and true.
But when it comes to financial minimalism, there is a way of thinking that celebrates that flurry of life with a simple, uncomplicated set of behaviours.
Let’s explore some ways the clean lines of minimalism can infiltrate our finances without compromising the enormity and energy of our tangled, complex lives.
Get in the habit of selling things that aren't essential!
It only takes one successful sale to understand how easy this is.
Putting things on Gumtree takes a few photographs, a friendly description and the coordination to be home when that person comes by to pick the thing up.
Or if you can drop off to their location, charge more.
That said, start small.
Sorting through your possessions is not only time consuming, but it’s emotional. For many, it takes time to come to terms with how to value their things.
So start with random stuff.
Things you might want to sell:
- Gift cards
- Jewellery (if expensive, get appraised first!)
- Toys and baby stuff
- Sporting gear
- China and kitchenware
- Backyard equipment
If you’re the type to traipse through op shops and markets at the weekend, maybe keep an eye out for things that you think you could on-sell for more online.
Hell, you might discover you’re actually quite good at this...
Simplify your spending
Have one bank card with your monthly/fortnightly/weekly money on it.
Decide what you think you need for the fortnight, pay the stuff you need to pay and then move the rest of your money away somewhere.
There are great ways of automating a budget (like the 50 30 20 or the Barefoot Investor way) and if you’d like to give that a crack, go for it!
But if that’s not your style, perhaps try and have an account that’s just for everyday use (accessible with a card) and another account where the rest of your money goes. (And don’t carry that card with you everyday).
There’s something about knowing when you’re about to run out of money that is a sharp way to change your behaviour. Trust yourself to get a bit better at managing your daily expenses each pay cycle and even if you don't at first, with the right amount of discipline you will learn to.
One card, one stream of money, time to think about everything else.
Consolidate your superannuation accounts
This is a biggy! (Because you’re probably paying fees for each and every account);
Steps to do after a coffee.
- Create a myGov account at www.my.gov.au, then link the ATO to your account. There’s a huge, obvious button.
- If you already have a myGov account, just log in and click on the ATO section.
- Go to the ‘Super’ tab. In this section, you can: see details of all your super accounts, including any you have forgotten about; and see details of all your super, including super the ATO is holding on your behalf.
- Click “transfer super” and pick which fund you’d like to be your homebase super fund.
- Then, whenever you start a new job or money comes in, submit this super account as your nominated fund.
- Then watch compound interest work its magic and when you’re older, you’ll be a happy little Vegemite.
This can be a really powerful step towards healthy financial minimalism. People often don't keep track of how many super accounts they've opened over their working life, and chances are that they have a number of super accounts that are still paying those annual fees. Paying for all those funds to slowly eat away at that money is just crazy.
Before deciding to consolidate your super accounts, it’s important to consider how rolling over your funds will affect any insurance cover or other benefits you have in your other funds (which will no longer be provided once funds are rolled over and your super account is closed).
Rewards programs are complicated and sometimes bullshit.
Some folk love the game of racking up points and skimming across various offers.
And they’re great at it!
But like day trading it’s a risky, time consuming activity.
And to make sure you don’t incur the fees or overspend on various cards and in various stores, it takes a fair bit of organisation.
So maybe have an honest look at your fabulous self...if you’re ready to draw up a spreadsheet and keep track of the various offers you’ve taken part in and can rollover money from card to card diligently, then cool.
But if you’re likely to find it tricky to keep all the moving parts in your head, give yourself the breathing space and just leave them alone.
When it comes to financial minimalism, just keeping things clear and simple is the most effective mechanism.