Financial minimalism; what is it, and why should you practice it?
Part of being a digital bank means we get to do things differently. And, from our research and experience over the years, one of the most important things we’ve been able to challenge is money management.
In fact, we have a new, unified approach, which we’ve called financial minimalism.
So, how did we get here? We spoke to people. Lots of people. People who spend, people who save, people who have taken control of their money and people who aren’t quite there yet... you get the idea. We got a sense of their hopes, dreams and fears, and what they really want from a bank. It gave us an idea of how people behave when it comes to money, and led us to a single understanding when it comes to your financial life.
What is financial minimalism?
Financial minimalism is our philosophy to help you find financial freedom. That means freedom from fear, from financial concerns, from stress, from guilt and from anxiety over self-imposed excesses. Ultimately, it means freedom of choice; because when your finances are simplified, you’re given more headspace to conquer everything else in life.
Ok, how do I practice financial minimalism?
We believe everyone should take responsibility of their money, but we’re here to help (because we know if we’re going to talk about the problems, we better have a few solutions up our sleeves, too). In this sense, we’ve broken it down into 4 key areas:
1. Owning your finances
It’s easy to understand why people feel overwhelmed and wracked with guilt about their cash: we’re primed to sacrifice what we need for what we want, and trip ourselves up with impulsive purchasing decisions that tend to pile up (the media cycle blaming housing affordability on a certain weekend breakfast isn’t helping either). But financial minimalism means taking accountability and conscious steps to financial management — acknowledging how you spend and making little changes where needed.
2. Taking action
Burying your head in the sand is easier than learning new information (especially when you think it means sacrificing the things you love). Financial minimalism means encouraging and supporting people to take action. Taking responsibility and control of your finances leads to more informed choices (which more often than not mean you can keep living the life you want, while saving for your bigger goals).
For example, we designed Free2Spend (our innovative in-app tool) to distill all your finances into one number that‘s unique to you. This is the number you’re free to spend each day on whatever you want, while having the comfort of knowing your financial goals are still on track. It’s a simple spending guide that’s not scary and not going to make you bury your head in the sand. Instead, it encourages financial awareness.
3. Feeling empowered
We’re culturally exhausted by the idea that millennials should be punished or made to feel guilty for their spending choices. Whether you’re drowning in debt or just struggling to manage your day-to-day expenses, the shackles of financial burdens are both common and easily managed. Financial minimalism means liberating yourself from the stress of circumstance by taking control of your money and your life. And once you get the hang of it, it’s surprisingly easy (here’s an example to get you started).
4. Finding balance
We’re constantly comparing our lives with other people, and it creates unhealthy social pressure. We curate our own lives based on the desires of others, and not our own wants and needs. Financial minimalism means having a balanced lifestyle, knowing where you’re at and what’s right for you – and being OK with that. It’s about having the confidence to push back on traditional expectations if they don’t feel right for you and focusing on what’s important (free from social guilt and judgement).
This is just the beginning of the journey to free yourself of financial burdens to discover a more real and financially confident you. Like we said, you’re going to hear a lot more about how to live a financially minimal life in the future, including more tips and tricks as well as stories from people who’ve been through it.