Living on a Budget

Jun 7, 2018

Money matters, you know. Everybody struggle with money because we need it to keep up with our living standard. Although minimalism is not about saving money, it's quite frequent that by being intentional about the things you own you end up saving some cash. Minimalism isn't frugalism, so you don't need to be obsessed with money saving, but to stay out of debt it's necessary to keep an eye on your money managing. Here you have some tricks I've learned in the last year.

Get a savings account

If you keep all your money in just one place it's inevitable that you end up spending a part of that money you are trying to save. Having an additional account for that money is a better choice because you create a kind of barrier that makes more difficult to spend your savings.

Pay you first

Don't wait until the end of the month to transfer the surplus money (if any) to your savings account. Save that money the same day you get your check to keep it away from your cards.

The amount of money that you decide to save is not as important as the fact that you are prioritizing your savings. And remember that you can always transfer the spare money to your savings account.

Use cash

In the online shopping era this could be old-fashioned, but by using cash you can see the actual money going far from your pocket. That feels uncomfortable and makes you more cautious with your spendings.

Realize what is your real living standard

Most of the time when we think on money saving we focus our attention on the expenses that are frequent or periodical, but we usually forget the real things that can unbalance your account drastically.

Imagine you buy a washing machine that costs $400. It'll break down sometime in the future, so it's a good practice to estimate how many years you think it'll last. Suppose that the estimated lifespan is ten years. OK, so you'll need to save $40 per year or, even better, $5 monthly during the next ten years. Then, whenever the washing machine bites the dust, you'll have enough money to replace it without ruining your savings. This applies to every other big expense you have made (car, fridge, TV, computer, smartphone...)

It'll be desirable if you could have a separate bank account to save that money, so you can always know how much money you have in your savings account.

Well, that were my two cents. I hope you find it useful.

Take care.

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