Cait Flanders was in a situation many people dream of.
She’d worked hard to pay off more than $30,000 of debt and was finally free to spend her money the way she wished.
But when she published her budget on her personal finance blog each month, something felt off.
“Deep down, I knew I could do better,” she says. “I’m not going into debt, but why do I think it’s OK to be spending all my money? Am I actually happy with where it’s going? I wasn’t checking in with myself.”
That was the start of her journey toward minimalism. Below, she explains what minimalism is, how it intersects with personal finance, and how it could save you money.
According to The Minimalists, “Minimalism is a tool to rid yourself of life’s excess in favor of focusing on what’s important — so you can find happiness, fulfillment, and freedom.”
For Flanders, that doesn’t mean owning only black, gray, or white clothes and throwing away anything that’s sentimental.
Instead, she explains it as “getting rid of anything that doesn’t add value … so that everything you have in your life does.” In other words, every single possession has a purpose — and actually gets used.
Flanders applies this philosophy to all areas of her life, from clothing to coffee.
“It’s removing anything that’s toxic and that has a negative impact on my life and instead putting time and energy into things that do add value,” she explains.
How Flanders put minimalism into practice
After she paid off her debt, Flanders started spending money without a second thought.
“Back when I was paying debt, I was putting up to 55 percent of my money toward debt repayment,” she says. “In the first year of being debt-free, I was lucky if I could save 5 to 10 percent.”
After that year, she became determined to stop spending money without knowing where it was going. She instituted a yearlong shopping ban, during which she bought only staples such as groceries, gas, and toiletries.
At the same time, she went through her house and got rid of anything she didn’t need or wasn’t using. She estimates she parted ways with 70 percent of her belongings.
“By the end of the first year, I had lived on 51 percent of my income, had saved 31 percent, and had traveled with the other 18 percent,” she says.
And that was just for starters, as Flanders extended her shopping ban to a second year. In the end, she saved $28,000 — and gained a whole new outlook on life.
Since the minimalist lifestyle espouses bringing in or keeping only things that add value, it’s a great way to save money.
“Before, I was someone who would spend very freely,” Flanders explains. “Anytime someone asked if I wanted to go to dinner or breakfast, I would always say yes. I didn’t think about if I wanted to do those things.”
Now she knows which (few) things add value to her life. As for everything else? At this point, it’s easy to say no.
How to apply minimalism to your life
If you want to make better financial decisions, minimalism might be able to help you. And it doesn’t mean you need to move into a tiny house or throw away your niece’s art projects.
As with most personal finance strategies, you can take what works for you and leave the rest.
First, read up on the theories and practices behind this lifestyle. Some of Flanders’ favorites are the blogs Becoming Minimalist and Be More With Less as well as the book You Can Buy Happiness (and It’s Cheap) by Tammy Strobel.
The next step? Surprisingly, it’s not making an enormous Goodwill pile. Flanders acknowledges that option comes with “a lot of privilege” and might not be realistic for some people.
Instead, she suggests tracking your spending for 30 or 60 days and then asking yourself if you’re happy with what you’re spending money on. If a certain category doesn’t feel good, determine how you can decrease your spending in that area.
Flanders also recommends doing a walk-through of your home to take inventory of what you have the most of. Her vice, for example, is books, and it shocked her to count how many she owned that she hadn’t even read. Having that number in her head curbed her desire to purchase more.
In the end, Flanders says, “It comes back to that question: Is what you’re spending on adding value to your life — or not?”
Thanks to Cait Flanders for chatting with me about minimalism and money! If you’d like to learn more, you can pre-order her book The Year of Less, which hits shelves in January 2018.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.50% APR (with Auto Pay) to 7.82% APR (with Auto Pay). Variable rate loan rates range from 2.43% APR (with Auto Pay) to 7.21% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.45% effective May 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.43% – 7.21%1||Undergrad & Graduate|
|2.43% – 6.65%2||Undergrad & Graduate|
|2.43% – 6.59%3||Undergrad & Graduate|
|2.44% – 6.87%4||Undergrad & Graduate|
|2.46% – 7.08%5||Undergrad & Graduate|
|2.93% – 9.67%6||Undergrad & Graduate|