Simplifying the finances is a journey, what works for me may not work for you. Your life situation is likely different from mine. But I do think that there is value is discussing how we do these things, both for experienced minimalists and for those new on the path. So here are a few things that have simplified my finances:
1) I am a minimalist. I do not shop for recreation. I generally do not buy objects or services that I do not need. I habitually look for a simpler way to do everything. It’s my favorite hobby.
2) I track every cent that I spend. I used to write expenses down on an 3 x 5 card that I kept in my wallet. Now I purchase most things with a cash back credit card. I use a debit card for the grocery store. I use cash to pay the boys for their chores and to buy the occasional coffee or water. * I first read about tracking every cent in the book Your Money or Your Life and I have found it to be an invaluable practice.
3) I evaluate my spending at the end of each month and the end of each year. Is the money spent in line with my values? If not, why did I spend it? I started with a written ledger and now use purchased software. I use YNAB (You Need A Budget.) My daughter-in-law uses Mint.
4) Except for my mortgage, I have no debt. I have in the past: car loans, school loans, consumer debt. I do not like it. It would be a really dire circumstance that would cause me to borrow money again.
5) I am constantly evaluating my purchases: Do I really need this? Is there a less expensive way to get the need met? How have other people solved this problem?
6) I learn about the lives of exceptional people. Not exceptional in a Kim Kardashian kind of way, but someone who lived quietly and donated 1.3 million to the school of their choice when they died exceptional. Or the man I recently met, who with his wife fostered over 100 special needs children over a 30 year period. And they did it in a house with about 1000 sq. feet.
That is a few of the things that I do. These things are just habits now and easy. When I started each of them, there was a bit of a learning curve.
I would love for you to share how you keep your finances simple.
* I travel a lot for my job, in seventeen counties. Sometimes, I am far from home or the office and I need to use the restroom. I’ll stop in a gas station and use theirs. If I am not buying gas too, I’ll buy a coffee or water, as my way of saying thank you for providing me with a clean restroom to use.