After clearing out all the miscellaneous stuff I had filling up my garage and closets, I decided to simplify my finances to match my new minimalist lifestyle. According to a recent article by Money Talk News, it’s no wonder people in the modern culture of consumerism have so much stress about money. I decided to take 30 days to streamline my finances to see whether it reduced my stress levels. In four weeks, I was able to go from having more than a dozen credit cards and retirement accounts to having just one of each.
Consolidating my accounts
Money Talk News suggests consolidating different accounts with one bank or broker. On the first week of my financial “cleanse,” I purged myself of too many accounts. I found out that one of the brokerage firms that handles my Roth IRA and a regular investment account also provides a checking account and debit card. I was able to link up the investment and retirement accounts for myself, my husband as well as my son so that I could rotate between the different accounts throughout the day if I wanted to trade. I closed my checking and savings with a big bank, using my brokerage firm instead. I found it extremely relaxing to not have to memorize so many passwords.
Going on a cash diet
On the second week of my financial cleanse, I decided to get rid of all my miscellaneous credit cards including a furniture store and department store credit cards. I chose one favorite credit card to keep. I still have access to the debit card through my brokerage firm, but tried using cash instead. According to Money Talk News, using cash often prevents people from spending too much money. Most people associate more pain with parting with cash as opposed to swiping a credit card. During the second week, my spending magically declined by $100 compared to the prior week.
Automating the finances
Another smart move I made was to automate my finances on the third week. I already had money automatically coming out of my paycheck and being saved into my 401(k), but I found out I could also request part of my paycheck go into my taxable investment account. My investment account serves as a savings account or emergency fund since I keep the funds in a money market account. By automating my saving, I don’t have to think again about my long-term financial savings goals until it’s time to access the savings.
Keeping out the clutter
I gave away the things I didn’t need to charity. But the real challenge wasn’t parting with my old stuff, but being happy with what I still have. Being a minimalist is about making due with what I have instead of always upgrading, replacing and redecorating. Experts say people with clutter tend to have more stress. During the fourth week, I practiced using what I already own or borrowing things that belonged to family or friends. I stopped hanging out with the people who used to encourage me to overspend.
After four weeks of living the minimalist lifestyle, I felt a tremendous sense of peace. When it comes to my money and things, I like the simple life. My new financial routine involves logging onto just one financial account each day. I no longer have to think about saving, which gives me more time to budget. Living below my means is not a challenge anymore because I’m happier and less stressed on days other than payday.
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