Having financial freedom ultimately means you have the freedom of choice; when your finances are simplified, you have more headspace to conquer everything else in life.
Financial minimalism is the key difference in being rich and being wealthy. Having a huge income makes you rich, but that doesn’t necessarily translate to being wealthy.
Earn more. Save more. Live MORE.
The first step to financial minimalism is to reduce debt by practicing a minimalistic lifestyle in your personal finance. With “Buy Now Pay Later” (BNPL) services such as AfterPay and ZipPay becoming more popular, it is easier than ever to mindlessly push everything into a running tab and rack up more debt faster than you realise. However, if you spend within your means and stop buying things you don’t actually need, all that money could go towards more productive usage.
Actionable insight: If you have any existing debts, use Dave Ramsey’s debt snowball calculator or debt avalanche calculator to domino your debts: ramseysolutions.com/debt/debt-calculator
Your financial affairs should be simple and straightforward. With a simple money management plan, your income could essentially be divided into three ‘buckets’:
A bucket for daily expenses, splurges and some buffer cash in case of financial mishaps
This bucket should essentially hold enough for your daily expenses (rent, groceries, utilities, transport, insurance), splurges and some buffer cash just in case of financial disaster where you have to quickly whip your wallet out.
A bucket for emergency savings
Ideally, this bucket should hold approximately 6 months of savings where you only touch it in emergencies like losing your job or getting sick. This bucket gives you the peace of mind that, in case anything unexpected happens, you have 6 months to work something out and pivot stress-free onto your next path.
A bucket for investments to build your long-term wealth and retirement nest egg
Financial independence is not a hard sprint but a marathon, and this bucket aims to get you a little wealthier every day. It includes your superannuation and any other investments you own (share investments, property investments, etc.)
Actionable insight: Speak to us for your tailored financial advice and planning strategy (greenassociates.com.au/services/financial-advice-and-planning/)
Financial minimalism does not mean living miserably and not spending anything you earn. It simply means finding the right financial balance for yourself so you can be liberated from the shackles of financial burden and take control of your money and your life.
Interested in finding out more? Speak to one of our team on 1300 815 921 or at info@greenassociates.com.au
At Green Associates, all of our advisers are fully licensed and listed on the ASIC Moneysmart Financial Adviser Register. Green Associates is committed to providing the best solutions for you and your wealth-creation journey.
