The Painless Guide to Getting Started with a Minimalist Budget

By reducing life to its material essentials, we gain time and energy for more meaningful things. People, experiences, knowledge, and other intangibles that money never could buy.

There are also significant financial benefits. As minimalists, we try our best not to make money the center of life, but it is important to be a good steward of the resources we’re entrusted with.

That’s why budgeting is a critical topic, even if not the sexiest one.

Indeed, pursuing a life of less will put more money under your stewardship, without particularly seeking it. With some minimal discipline and planning, I’m continually surprised at how far a modest income stretches.

The following tips made it a hundred times easier for us to form and follow our own minimalist budget. Perhaps they’ll make even a small difference for you, too.

No pain, no gain…kinda

It’s true that worthwhile things are difficult. Setting and following an intuitive, minimal budget is no exception.

On some levels, it’s not too different from a tough workout or a big project at work.

It doesn’t feel comfortable, but if you’re diligent, you’ll get even more out of it than you put in.

However, it shouldn’t be excruciating, either. There are two reasons.

First, imagine a workout that left you on the brink of tears.

Could you, or any sane person, sustain that for months and years on end? Of course not! Same goes for budgets.

Second, most of us do perfectly fine with a relatively gentle budget — like simply cutting back on novelties and luxuries.

But if that causes you genuine grief or anguish, there might be other concerns to deal with first. Consider exploring them with a or counselor. He or she may help identify underlying concerns you didn’t even realize you had.

Pay yourself first, with a twist

Everyone tells us, “Pay yourself first.” I know I’ve heard that too many times to count.

The general idea is to put away a predetermined amount of money before spending on anything, since that makes it harder to go overboard.

The advice is well-meaning, and worth following.

But there’s one important twist.

Money is valuable, but time is invaluable, so “pay” yourself in time above all.

It’s essential to stash cash right away, but it’s not a coincidence that we use the phrase “spending time.”

Amusement and relaxation are perfectly good things — vital, even — but easy to mis-prioritize. Skills learned and relationships nurtured need to come first on average, if not every day.

Minimize accounts

The ultimate theme here is simplicity; stripping away the excess and conscientiously enjoying the valuable bits that remain.

Your money, perhaps most of all, benefits from simplicity.

Money is for either spending (on expenses) or saving (for long-term goals and/or emergencies). That’s about it. With two core purposes, that means two accounts is sufficient for most people

Assuming you have a high-interest savings account (like this one with CIT) and a checking account, adding more accounts are rarely worth the headache.

Each one is an opportunity to lose track of spending, or incur overdraft charges on a transaction you forgot, or simply waste time shuffling funds and adding pages to your tax return.

It’s popular to dedicate separate accounts to separate purposes or goals, but discipline and close tracking of a single account is (usually) the truly minimalist way to meet the same needs.

Use exactly one credit card

No, credit cards are not terrible. In fact, I can’t recall knowing a wealthy person who doesn’t use them. More importantly, neither can I recall knowing a wealthy person who uses them irresponsibly.

The point, of course, is to avoid carrying a balance and thereby avoid the bane of personal finance: interest payments.

However, with a card that you treat like cash, it’s easy to see all spending in the same place all while earning points or cash back, with the added benefit of fraud protection and incredible travel convenience.

And on a strictly practical level, most of us cringe at carrying heaps of change plus a bigger wallet or bag to sort it all.

You can accomplish this with a single card, of course. Chasing sign-up bonuses isn’t a great use of time (with rare exceptions), and more cards only increase the ease and temptation of overspending.

The best options depend on your credit, spending patterns, and so forth, but I’ve been a happy customer of the Capital One Venture card for several years, and would recommend it to anyone who lives a frugal, fairly minimalist lifestyle. The awards rate is good, and their surprisingly broad definition of “travel” expenses means that points cover more than I anticipated.

Track what really matters

Despite our best efforts, most of us can’t adhere perfectly without some cold, hard numbers to keep us on track. That’s why a budget is simply less effective if we fail to track ourselves against it.

Not only does it keep you honest, but it’s downright fun to watch debt shrink and net worth grow every month!

To that end, I’m a huge fan of Personal Capital, which is a quick and easy way to see all that flows in, flows out, and adds up in one place. Connecting it to a few financial institutions (ahem, Fundrise) is a little annoying, but for the most part, it’s a piece of cake to set up.

Be kind to yourself

Of course upholding a budget is hard.

I wouldn’t have struggled for years if it was easy. And I wouldn’t have felt compelled to write this article if it were second-nature to all of us.

Like with all difficult things, sometimes we simply miss our objectives. That’s where a little self-compassion goes a long way.

Granted, a month-long shopping or totally ridiculous luxury purchase might mean something deeper is going on.

But if your eyes drift from the prize on occasion…

If your savings rate falls just below what you hoped…

Then take a moment to acknowledge what you missed, remind yourself why that miss detracts from the goal of a simpler life, then give yourself the gift of a fresh start.

Just like frivolous material goods, guilt is not worth carrying.

Field notes from a (sometimes) simple life.

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