Minimalist Money Habits to Practice - Sincerely, Denise (2024)

FAQs

What is the 50 30 20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

A minimalist approach to personal finance focuses on what matters most and simplifies your finances. Having a life that's rich in experiences, not just possessions, is more than just being frugal or budgeting.

A minimalist budget is one where you eliminate the non-essentials and the clutter from your budget to leave more money for what you value most. A minimalist budget can help you to reduce your monthly expenses, simplify your financial life, and get out of debt.

Regardless, people who adopt a minimalist lifestyle are usually also frugal and thrifty. Instead of spending money on stuff, they may opt to put it into stocks or other investments. Living minimally is all about owning less, and therefore buying yourself more financial freedom.

The 40/40/20 rule comes in during the saving phase of his wealth creation formula. Cardone says that from your gross income, 40% should be set aside for taxes, 40% should be saved, and you should live off of the remaining 20%.

In a series of tweets, Ramsey suggested budgeting for food, utilities, shelter and transportation — in that specific order. “I call these budget categories the 'Four Walls. ' Focus on taking care of these FIRST, and in this specific order… especially if you're going through a tough financial season,” the tweet read.

The idea behind Project 333 is simple: Wear only 33 articles of clothing for the next 3 months. All clothing, accessories, jewelry, outerwear, and shoes count towards your number. Exceptions include wedding rings, underwear, sleepwear, in-home loungewear, and workout clothing.

It asks two simple questions: Have you used this in the past 90 days? Will you use it in the next 90 days? If your answer to both is no (with the exception of things like seasonal clothes, holiday decorations, or anything used only for a specific part of the year), it's time to get rid of that thing.

In the video, professional organizer and TikTok user Spaces By Emily shares, “If you are trying to figure out whether or not to get rid of something, use this rule: If it costs less than $20 to rebuy, and you currently don't use it and haven't in a while, get rid of it.”

Do minimalists believe in God? ›

Whatever your religious beliefs, we have no spiritual advice for you. The beautiful thing about minimalism, though, is it works whether you're religious or not. We personally know minimalists who are Christian pastors, minimalists who are practicing Buddhists, minimalists who are atheists.

It's okay to toss the stuff if it's not adding value to your life: donate it, sell it, recycle it. Let go of it so you can focus on what's important in your life. Most people won't even notice, especially the people who care about you. Read this essay and 150 others in our new book, Essential.

According to a survey by the Simplicity Institute, an organization that surveyed 2,500 people across various countries who self-identified themselves as living with fewer possessions, 87 percent of respondents indicated they were happier now than when they owned more possessions.

20/20 rule for minimalist living

The Minimalists Joshua Fields Millburn and Ryan Nicodemus invented this great minimalist rule: If you don't use it and you can replace it for less than $20 in 20 minutes, you can declutter it! I LOVE this tip. So often we hold onto things because we think we might use something one day.

But amid ongoing inflation, the 50/30/20 method no longer feels feasible for families who say they're struggling to make ends meet. Financial experts agree — and some say it may be time to adjust the percentages accordingly, to 60/30/10.

It may not work for everyone. Depending on your income and expenses, the 50/30/20 rule may not be realistic for your individual financial situation. You may need to allocate a higher percentage to necessities or a lower percentage to wants in order to make ends meet. It doesn't account for irregular expenses.

Disadvantages of the 50/30/20 Budget

Many people find it hard to allocate 20% of their income toward savings. If you live in a large metropolitan area with a high cost of living, it may be difficult or impossible to include all your needs with only 50% of your income.

The rule simplifies the process of saving and spending by categorising your budget into three main categories: needs, wants and savings. This can help you achieve financial security for your future needs while managing your current expenses effectively.