The amount of money we spend basically depends on how much money we earn. Of course, there are people who live beyond their means and there are also those who buy only the most necessary, but in general, the more we earn, the more we allow to spend. It is logical, but often, as income increases, people start to make their money useless, just because it can. They buy things that are not necessary at all, simply to spend their money, but if these unnecessary expenditures were eliminated, it would be possible to secure a stable financial situation in the long run and spend the money more effectively. That is why it is very important to introduce minimalism into your finances, or to spend money only on what really is needed and to bring some benefits. How do you limit your spending and introduce minimalism into finance?
Explore your spending and its usefulness
In fact, many do not even realize that their money is wasted, even if the budget is planned. When planning a budget, all expenses are recorded, but there is no look at what happens to these expenses afterwards. For example, if you spend 300 euros per month on food, it may seem sensible until you realize that food worth at least 100 euros each month is thrown out of the field. The same goes for many other categories of expenditure. It is also necessary to investigate whether the purchases made are worth it if you use them. For example, if you buy expensive branded goods, evaluate whether the price really matches quality and whether the brand really gives you something real, or is it just a whim? If you look not only at how much you spend, but also at how useful these spending is, you will be able to better assess where to save.
Understand how you can opt out
When you are aware of your spending and understand what is useful and what is not, you need to think about what you can safely give up and not spend more money on. In reality, it is not that easy to do it, because it will be difficult to give up a lot. You can’t simply organize your spending in two categories – necessary and unnecessary. There will be things you can deal with right away, there will be things that will have to look for cheaper alternatives and there will be things that will be difficult to give up, but you have to think rationally and abandon everything.
Even when you have theoretically turned off all unnecessary spending, the remaining spending should be broken down by priority. As mentioned before, it is impossible to treat everything in an instant, so it is necessary to understand what those things that cannot really be dispensed with and what is to be refused if necessary. It should be borne in mind that the main priorities must be not only the payment of bills, but also, for example, contingency provisions, pension fund deposits, and so on. Only when all is paid can you go into less important spending.
Create an action plan
Finally, there is a need to develop a real action plan for putting this minimalism into practice. Just because you theoretically understand the over-spending and uselessness of your spending does not mean that you will be able to give it up. You have to think how to prevent yourself from knocking down money on unnecessary things. If you trust yourself and your willpower, then there will be no problems, but if you think you will not be able to force yourself to give up luxury and wastefulness, be sure to do so by making automatic transfers to savings accounts and funds. Then you can be sure that the money goes where it should go and you will not have the extra money to waste.
If you take all of this into consideration, you will be able to live a simpler but much better and more stable life. Every cent you earn will really bring you real benefits, not just wasting luxury or other unnecessary goods that do not add value to your life.