Personal finance is important to achieve financial stability and security. There are many ways to manage your money, and you need to choose one that aligns with your goals.
One popular lifestyle that is also being applied in financial management is minimalism. In a nutshell, minimalism posits that less is more. A minimalist will only hold onto things that are essential to their lives and get rid of their other stuff. This lifestyle encourages people to reflect on what’s important to them so that they can avoid acquiring or keeping things that don’t add value to their lives, detaching themselves from materialism.
From a financial perspective, this lifestyle can help people make conscious purchase decisions to avoid debt or incurring unnecessary expenses. But everything has pros and cons. While a minimalist lifestyle may promote a simple and more organized lifestyle, it can also negatively affect your finances.
Throw Now, Buy Again Later
Minimalism promotes the idea that you should only own what you need. On paper, that sounds great. To some extent, it’s great to have less stuff. You get to stay organized and clear out some space in your home, which can help with your overall well-being.
But following this philosophy might burn your savings in the long term. Consider this scenario: you have clothes that you no longer wear, even though they still fit or are still in good condition. But because they don’t “spark joy” anymore and you haven’t used them for a long time, you have to let them go. After you get rid of those clothes, you realize later on that you actually need them, so you end up buying new ones. In this case, being a minimalist will cost you more.
You might also have stocks of supplies that you don’t need right now but will need in the future. Some of them may include extra wires, plastic bags, or a half-empty caulk. Throwing these things away won’t really help you save money.
Minimalist Products are Expensive
The popularity of minimalism has pushed people to follow its trends. And that includes buying things that are considered minimalist to replace old things. This way, they get to have that “Instagrammable” type of minimalist interior that they see on social media.
Some common design trends of minimalism include pieces of furniture within a single color palette and rustic decor. These items tend to be very pricey (look no further than Marie Kondo’s own online store), especially now that they’ve become in demand. Companies are also taking advantage of the hype. They plaster the word “minimalist” in the names of their products to jack up the price, but that’s a conversation for another time.
Certainly, minimalism promotes conscious consumerism. For example, it will be better for you to buy expensive furniture pieces if they’re more durable and high quality than their cheaper alternatives because the expensive ones will last you a long time. But if you purchase something out of your budget, you will still hurt your finances. The entrance gate of minimalism has a costly entrance fee, so you need to think twice before diving into this kind of lifestyle.
Minimalism Can Be Emotionally Demanding
The emotional impact of minimalism should also be taken into account. Decluttering your entire home and getting rid of most of your things can be difficult emotionally, especially if you need to get rid of things that hold sentimental value. Maybe you have trinkets given to you as gifts by friends and family. Or maybe have collections of custom military coins or trading cards that you spent a lot of time and money on in the past but no longer give joy to your life.
Letting go of things that have sentiment is difficult. They’re no longer essential, but these things can still add value to your life, even if it’s just nostalgia. And to cope with the loss, you might engage with more shopping just to fill the void, which is the opposite of what minimalism stands for. In this case, shifting to a minimalist lifestyle may not be financially wise.
Minimalism does have its financial merits. It will help you control your spending. You will need to evaluate each purchase to ensure that the items you want to buy will add value to your life and serve a purpose. But you need to be aware of this lifestyle’s possible negative effects on your financial health, especially at the beginning, to determine whether it’s the right lifestyle for you.
