How to Live like a Minimalist Financially

If financial excess and entitlement defined the first decade of the millennium, a minimalistic backlash may well define the second, according to a 2010 J.D. Power and Associates report. Minimalists shun excess. Although the term usually applies to material things, the way you spend your money is heavily influenced by the way you spend your time and energy. The key to living like a financial minimalist is to take a holistic approach to identifying your clutter — whether it's in your bank account, your home or your lifestyle — and eliminating it by simplifying your finances and your life.

Hold a yard sale to clear your surroundings of as much extraneous "stuff" as possible, including clothing, furniture, knick-knacks, tools and hobby equipment. Create an emergency fund with the proceeds of your sale. Donate everything that doesn't sell.

Track your spending to identify opportunities to save money on things that have become part of your lifestyle of excess, and then change or eliminate them as part of your new, minimalist lifestyle. Examples include swapping away-from-home coffee and meals for homemade; switching from buying newspapers and magazines you barely read in favor of browsing headlines online; learning to change your own oil; and doing your own household repairs.

Go through your bills with a mind toward reducing each one. Conserve electricity. Get rid of a rarely used landline phone or switch to an inexpensive Internet-based phone. Discontinue television programming packages and cell services you don't really need.

Eliminate debt. Use the money you're saving to pay off the lowest balance credit account first, and then put that payment toward the next-lowest balance as part of a "snowballing" debt-repayment plan. Alternatively, pay off the account with the highest interest rate first and work your way down.

Reduce your desire to acquire possessions. Avoid window shopping — online and in person — as well as ad-laden media, catalogs and other sources of temptation. If there's something you can't get out of your mind, impose a 30-day waiting period before you buy it. And buy it then only if you can pay cash.

Take advantage of free entertainment. Borrow books and movies from the library. Attend special programs at a local university. Spend time at a park. Enjoy community events like festivals and concerts.

Simplify your life. Practice time-management techniques for work and domestic tasks, for example, and limit commitments. Cut activities you no longer find gratifying. Schedule a daily period of alone time away from distractions.


  • Pack up and store the yard sale items for 30 days if you're not able to part with them right away, and then sell everything you were able to make do without. Plan to repeat this process in six months, after you've adjusted to the minimalist lifestyle and can summon to the courage to pare down more aggressively.

    Re-evaluate your finances and your lifestyle on a regular basis to identify areas where there's room for improvement. Make adjustments as necessary.