Updated: Nov 5, 2021
What is an Example of Financial Wellness?
Spending wisely and within your means. Having an emergency fund. Having access to tools and education to make beneficial financial decisions. Having a financial plan for the future, including a budget and financial goals
When Covid-19 began, no one knew it would become a pandemic. When World Health Organization announced, it was a pandemic, things begun to take a turn. States had to lock their borders. From there on, businesses and organizations started to close their doors according to the health regulations. The move was meant to stop the spread of the virus, which affected the global economy.
Many lost their jobs while others had to face pay cuts. No one was prepared for such a move, and if you didn't have any savings or other sources of income, you were doomed. However, things are slowly getting back to normal with the vaccine in place. You need to make a few financial adjustments to survive the new year. This is why we recommend financial minimalism.
What is Financial Minimalism?
Let's start with what minimalism means. The word stands for getting rid of things or items that don't add value to your life. Instead, you focus on things that bring joy and make your life fulfilling.
Now when it comes to financial minimalism, it refers to removing unnecessary expenditure from your budget. Eliminating the unwanted expenditure helps to avoid debt, save cash and even build your wealth. Additionally, having a minimalistic approach helps you accomplish financial goals faster and even improves your attitude towards your own finances.
How The Minimalist Lifestyle Improves Your Finances
Incorporating a minimalist lifestyle helps you to make a huge change when it comes to your finances. Some of the financial improvements include:
Clarity Around Your Core Values
The minimalism foundational principal is to let go of what doesn't benefit or serve you. Once you let go, you can focus and grow, the things that matter to you.
It starts with those who are around you. How do they live? Is it within their means or not? For example, taking unplanned trips with your friend’s can cost a lot, which you may not be financially prepared for. Therefore, it can be wise to have funds set aside for unexpected events. This helps to minimize stress, as well as give you control over your finances, as you are preparing for current and unusual spends.
Sticking to your budget, put you in the position of telling your money where to go when it comes in, rather than wondering where it has gone.
Setting boundaries, doesn't just pertain to physical contact, but to all aspects of your life including your personal finances.
So If you can afford the trip, make them aware that you haven't budgeted for such a big unexpected spend.
A Minimalist Lifestyle Helps You To Spend Less
Having this type of lifestyle helps you to spend less, as you are intentional about what you bring into your life, mindful that the item serves a purpose in your life rather than to please others. A minimalist lifestyle encourages you to purchase what you need and within a given budget. This, in turn, helps you to save more
It Enables You To Pay Off Your Debt Faster
By purchasing less, you end up saving money, which can be channeled to clearing or paying down debt. For those that may not know where to start, try paying down a loan that has accumulated a lot of interest, moving down to the less pressing debts. Settling your debt on time helps to improve your credit score and keep interest rates to a minimal.
A financial minimalist lifestyle is one can be of the best ways to budget and clear debt. Having let go of unnecessary expenditure gives you a chance to invest in things that bring you joy, peace and wellness. Decreasing your outgoing's inadvertently increases your income, thus empowering you to step into living the life you want.