DE-CLUTTER YOUR FINANCES TO FOCUS ON THE MOST IMPORTANT THINGS

The ‘minimalist’ philosophy promises to be as good for your pocket as your head, writes John Cradden

THE term ‘minimalism’ has been around for decades and used traditionally in an arts context. But, more recently, it has been adopted by a movement that focuses on reducing the clutter in your life — both in terms of physical objects and in other distractions. Advocates of minimalism as a lifestyle say that doing away with unnecessary ‘stuff ’ or distractions in your life will benefit your pocket as well as your head — but they add that it does not mean you stop spending money. Rather, the idea is to be smarter about your finances by living with less, and changing your focus from making money to improving your quality of life.

Much of the chatter about minimalism as a lifestyle philosophy was kick-started by a feature-length US Netflix film called Minimalism: A Documentary About the Important Things.

Produced by Joshua Fields Millburn and Ryan Nicodemus, and released in 2015, it is one of a number of films, books, podcasts and speaking tours the pair have created about their journey, that saw them leave high-level and well-paid corporate careers to successfully pursue minimalist lifestyles.

LETTING GO

The film inspired Dubliner Catriona Lindsay to de-clutter and get rid of stuff she no longer needed when she was preparing to move home.

“Now in my home, I only buy things that I love, rather than things that I like,” says Lindsay, who produces Irishconsumer.com, an online lifestyle magazine.

“The documentary for me was about letting go of stuff you don’t need. It makes you think before you spend, so inevitably you become better with your finances. I also noticed after a few months that I started to see a reduction in the amount of money I was spending on recycling, so there’s less waste.”

But beyond de-cluttering, not buying stuff she does not need or love, cutting down on takeaway coffees, and walking as much as she can or using public transport, Lindsay is not taking the lifestyle much further.

“Minimalism is different for everyone; there is no right or wrong way of practising it. It’s all about how it will fit into your life,” she says.

Indeed, the suggestions that, for instance, you need to own fewer than 100 things, or that you cannot own a car, a home or a TV, to pass yourself off as a minimalist have been debunked. For Millburn and Nicodemus, minimalism is more than just about getting rid of stuff you do not need or simply living with less. Living with fewer material things is still important, but equally important is the control it gives you to focus on more vital aspects of your life.

James McLean also stumbled on the

Netflix film one night a few years ago while recovering from a bout of flu in a holiday apartment. While he had heard the movement characterised as “almost a cult” (“I did think that the guy living and travelling with only 50 items was on the extreme end of things”), the film prompted him to embrace the minimalist lifestyle in a big way, and particularly when it came to his finances.

“Fundamentally, the minimalist movement has something important to teach us about living with less... you don’t need stuff to be happy,” he says.

As a single man in his 30s, he now works part-time and lives in the smallest bedroom of his house in Dublin, renting out the other rooms. He uses everything he owns and borrows, and rents other items as necessary.

“Not having loads of unnecessary stuff and being happy with less means I am living comfortably in a smaller space and earning €12,000 per year tax-free renting out the other rooms in my house,” says McLean.

He enjoys four-day weekends, hardly ever pays for checked luggage, and spends money on experiences rather than material things, such as eating out with friends.

He has a zero balance on his credit card, €20,000 in savings, €8,000 in investments and

“a cost of living that is so low that it is largely covered by my tenants”.

So his financial goals are less to do with accumulating significant assets and funds, and more to do with allowing him to make the most of his free time.

He says: “I can go and buy a flashy new car to make all my friends green-eyed, but what am I chaining myself to by doing that? I would have car loan repayments, which means I have to work all the time to meet that obligation. For what? So other people can look at how nice my car is while I am sitting in traffic?”

And while he has less stuff, his home is not completely bare. “It looks very normal, but the key thing I can say is that I use everything in the house and it all adds value to my life.”

KEEP IT SIMPLE

The financial advice from minimalist advocates like Millburn and Nicodemus and others will be familiar to anyone who actively tracks their budgeting and expenses, but has an added emphasis on keeping your finances as simple as possible.

The first principle is that regardless of how much you earn, you must spend less than you take in. So figure out what your absolute expenses are, such as rent, mortgage payments, utilities (gas, electricity, phone, broadband), car insurance, Leap card, health insurance, fuel, food and savings.

In addition, take the time to shop around, and make sure you are not over-paying for some or all of these things, such as the phone, broadband, health insurance, etc.

Then figure out how much you need to live on, set a budget and stick to it. There are loads of apps that can help you with setting up a recordable budgeting system, but one way to help you prioritise expenses is to categorise them into items that you absolutely need — and items that are optional, or luxuries.

Getting rid of debt should be a top priority, as this is a consequence of spending more than you earn.

Another key principle of minimalism is to question all your purchases. Research shows we spend huge amounts of money on impulse purchases (particularly online, according to a recent survey by An Post).

But earning money takes time, so when you are making a purchase, ask yourself if it really has meaning to you. Will it make your life easier, will you use it, or is it something you are buying because you just really want it?

“My attitude toward consumerism has changed drastically,” says McLean. “I used to look at all the pretty things I wanted to buy but now I actually regard them with a small degree of contempt... I weigh every purchase up in terms of the value it will add to my life.”

Another principle is to actively invest more in order to generate extra income in the future, and to build an emergency ‘rainy day’ fund.

If you have ever read or heard anything about the Fire (Financial Independence, Retire Early) movement — which advocates building up enough savings and assets to cover your living expenses or at least achieve a greater degree of financial freedom — it should be no surprise to see that there is some crossover in what both movements advise about managing your money.

Indeed, McLean recently attended a local meet-up of Fire followers for the first time, but he was struck by the big focus on earning, saving and investing.

He says: “While Fire is a long path to walk, I would have expected more conversation around the retiring bit. I’ve never lost sight of the retirement aspect.”

McLean adds that he considers himself almost semi-retired, in that he can work fewer hours if he needs to. Although he notes that being single with no children does help.

Minimalism is more about “thinking critically about the difference between your needs and desires”, says McLean. “This ultimately leads us on to asking much deeper questions about our own personal happiness and the quality of our lives. I now buy fewer, better things that are useful and valuable to me. I don’t buy things that I don’t need.”