Have you ever thought about how minimalism ties into frugality and ultimately helps you build wealth? You and I are about to dive deep into this intriguing relationship. I will explain why living with less gives you more financial security, more freedom, and more happiness.

Minimalism: What Does It Really Mean?

Minimalism is a lifestyle decision that focuses on living with less. 

Less stuff. Less clutter. Fewer distractions. 

Being a minimalist goes beyond cleaning your closet or choosing neutral decor. Minimalism emphasizes discovering what truly matters to you. Minimalism is about letting go of everything that doesn't serve a purpose.

Minimalism is about intentionality.

It's about recognizing what brings value to your life. You then eliminate anything that does not serve a purpose in your life.

You promote the things that add value. You remove the excess that distracts you from what you value the most.

By understanding what truly adds value, you can create a space that fosters a sense of peace and freedom. Minimalism can inspire you to live a more intentional life.

When I first moved into my grandparent's house after they passed away, the house was filled with junk. The entire downstairs was full of boxes, unused or barely used items, and no space was usable. What is the point of having space or rooms that do not serve their purpose? Having to deal with and go through a long process of getting rid of the majority of my grandparent's items made me realize the importance of decluttering and the practicality of a minimalist lifestyle.  

Frugality: How Does It Connect To Minimalism?

If minimalism is about living with less, frugality is about spending less. Frugality is not about being cheap. Being frugal does not mean depriving yourself. Frugality means being smart with your money. 

Frugalism gives you freedom. You live below your means. You then can find ways to make your money work for you.

Frugality is an often misunderstood concept. Being frugal is usually thought of as penny-pinching and avoiding spending money altogether. However, frugality is more about maximizing value. It's about making mindful decisions that align with your priorities, much like minimalism.

Frugality and minimalism share a lot in common. Both encourage a focus on what's essential and reject excess. They require you to be conscious of your choices – whether they involve what you bring into your home or how you spend your hard-earned cash.

The Wealth Connection

Now, how do minimalism and frugality connect to building wealth? Here are seven ways living a minimalist and frugal lifestyle helps you build wealth.

Reduce Your Expenses

The immediate expense reduction is one of the most direct connections between minimalism and wealth-building. When you embrace minimalism, you naturally find yourself buying less. 

The latest gadgets no longer entice you. You no longer want to follow the latest fashion trends and buy what is in style this season. You've shifted your mindset to prioritize quality over quantity. 

By spending less, you're not only reducing clutter. You also keep more money in your bank account!

When you begin to practice frugality, you're doubling down on this effect! Frugality teaches you to spend your money wisely. You opt for things that offer long-term value. You now want to buy quality items that will last a long time, not break in a few months. 

You're not just cutting back on unnecessary purchases. You're also making sure that when you do spend, it's on things that matter.

By reducing expenses through these lifestyles, you can save more money, which is fundamental in building wealth. Bankrate found that only 19% of households could grow their emergency savings in 2023. 

Embracing minimalism and frugality can help reverse this trend by encouraging you to save a larger portion of your earnings.

Live Below Your Means

Living below your means naturally follows reducing your expenses. A fundamental financial goal is to have extra money left over at the end of the month to save. How can you do that? 

Create and follow a budget. Keep track of your expenses. You want more income and cash flow in your account than you spend monthly. 

For example, if you make $4,000 a month, you want to spend less money than that every month. You then have money left over to save and invest. If you go beyond your monthly income, you are now going into debt. 

Both of these lifestyle choices help you to live below your means. Once you successfully successfully develop the habit of spending less than you make every month, you can begin to work to build up your savings and investments. 

Increase Your Savings And Investments

You can be proactive in directing the extra funds toward savings and investments.

Imagine saving an additional $200 every month simply because you no longer buy things you don't need. Or you now go out to eat or to the bars less. That's $2,400 a year! Over time, this can grow into a substantial nest egg, especially if you invest wisely.

A New York Life Wealth Watch Survey found that 78% of adults struggle to save for retirement.

Investing is vital to building wealth. With the extra funds saved from practicing frugality and minimalism, you can grow your money through stocks, bonds, real estate, or retirement accounts. 

Compound interest is powerful. It can turn modest savings into a substantial fortune over time.

Are you willing to make sacrifices to your lifestyle so you can save and invest? Your future self will thank you. 

Focus On Financial Goals

Minimalism and frugalism help you to reach your financial goals.

Whether paying off debt, buying a home, or saving for retirement, practicing frugality and minimalist lifestyles helps you align your spending and saving habits with your financial goals. 

The most challenging part is retraining to stop a bad financial habit and practice a positive one. 

Do you want to invest more money every month? You can allocate more money toward your investment fund by reducing your spending on unnecessary items with your finances. Minimalism frees you from the burden of maintaining a vast array of possessions, allowing you to focus on experiences that genuinely enrich your life.

According to Fidelity Investments, having clear financial goals significantly increases your chances of achieving them by:

• Know what motivates you. 

• Articulate and document your financial goals by clearly understanding your short-term and long-term financial goals. 

• Be specific about your risk tolerance level.

• Know your principles. They can help guide you during times of market volatility and turmoil. 

• Continue to update your financial plan and goals. 

Practicing minimalism and frugality makes you more likely to prioritize these goals, track your progress, and adjust as needed.

Define your financial objectives. Create a plan to achieve them. Be crystal clear about your motivation and why you want to achieve your financial goals. You can have short-term, medium-term, and long-term goals.

Clear financial goals incentivize you to stick to your minimalist and frugal lifestyle.

Decrease Your Stress And Increase Your Happiness

Financial stress is one of the most common stressors people face. Worrying about money negatively affects your mental health, relationships, and well-being. Adopting a minimalist and frugal lifestyle can help alleviate this stress.

When you have fewer possessions, you have less to worry about. You’re not overwhelmed by clutter, maintenance, or storage issues. This physical space often translates to mental space. You reduce anxiety and stress. As you become more financially secure through frugality, the stress of living paycheck to paycheck diminishes.

Increased happiness is another significant benefit. Minimalists often report higher satisfaction levels than their peers. Minimalists focus on their experiences and relationships rather than material possessions. So, not only are you building wealth, but you’re also enhancing your quality of life.

Develop A Long-Term Mindset

Both minimalism and frugality build a long-term mindset. A minimalist lifestyle helps you make conscious choices about your purchases. This mindset ensures that the items you own serve a practice purpose. Frugalism assists you in reaching those short to long-term financial goals.

This mindset values lifelong satisfaction over short-term pleasure. This critical mindset shift can help you to set and achieve financial goals. 

The wealthy think long-term. Some of the most affluent families are thinking generationally. They set up the proper financial arrangements to secure their wealth. The parents then pass it on to the next generation. 

Money As A Tool

Money is a vital tool that you use daily. A minimalist lifestyle optimizes your use of the money. You stop comparing yourself to the Joneses. A frugal lifestyle advices you to be wise with your money. 

You are happy with your lifestyle decision. Frugalism helps reduce your expenses while maximizing the monthly money you can invest. You could invest in:

• Retirement accounts (401k, IRAs, 403b, etc.) 

• The stock market.

• Real estate.

• Land and commodities.

• Starting your own business.

• Building passive income streams.

• Hard financial assets. 

• Financial education. 

Money is energy. Money represents your labor. You can continue to trade your precious time for it. You can also learn how to utilize it in ways that allow you to get your time, energy, and attention back—recognizing the role that investing plays in making money a tool that works to improve the life of your future self. 

Summary

The world equates success with accumulating as many things as possible. Minimalism and frugality offer a refreshing contrarian perspective to consumerism. They teach that true wealth isn’t measured by the number of possessions you own but by the freedom, security, and happiness you experience. By embracing these lifestyles, you are more likely to be on the path to financial success. 

Order your copy of Thriving Solo: How to Flourish and Live Your Perfect Life (Without A Soulmate). It is now available in paperback and Kindle on Amazon.

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Views expressed in this article are the author's opinions and views and do not reflect the views of Secure Single. It is intended for informational and educational purposes only. Secure Single does not give health, medical, relationship, travel, or financial advice. Secure Single does not provide advice of any kind. Always consult and speak with a professional. James Bollen is the author of Thriving Solo: How to Flourish and Live Your Perfect Life (Without A Soulmate). It is now available in paperback and Kindle on Amazon.