Chad Hensley
Jan 22 · 5 min read

Over the past few years, countless books, podcasts, and documentaries have explored the concept of minimalism and the benefits of a simplified lifestyle. Merriam-Webster dictionary defines minimalism as a “style or technique — as in music, literature, or design — that is characterized by extreme spareness and simplicity.” Being applied to more and more disciplines, it retains its core attributes: intent, purpose, and simplicity. In Netflix’s new hit series “Tidying Up,” best-selling author and design guru Marie Kondo encourages viewers to purge items that no longer “spark joy” and to treat the items that remain “with respect.”

“The ultimate goal of tidying is really to learn to cherish everything that you have, so that you can achieve happiness… so that you can live comfortably,” she explains.

Photo courtesy of Netflix

At its core, minimalism is about removing excess from your life. There’s a large body of evidence that suggests that living with less reduces your carbon footprint, helps relieve stress and anxiety, and can even strengthen relationships. But how does a minimalist lifestyle impact your finances?

The concept is quite simple: living a simpler lifestyle means buying fewer things, which in turn helps you save money. Almost everyone owns something — or perhaps many things — that they don’t actually need. Case in point, each American throws away roughly 70 pounds of clothing and other textiles per year on average, equivalent in weight to more than 200 men’s t-shirts. It doesn’t take a lot of rumination to understand the threat this poses not only to your wallet, but to our environment on a grand scale.

Do you think you could benefit from a simpler lifestyle? Here are a few ways you can begin to introduce minimalist principles into your budget:

Write your reasons

Make a list of the reasons you want to adopt a minimalist lifestyle. Whether you’re sick of dodging calls from debt collectors or you want to start your own business, documenting your reasons for living more simply will help keep you motivated throughout the process.

Determine your financial values and priorities

In order to live simply, you need to establish what is and is not important to you. One way to do this is by defining your financial values and priorities. Examples of financial values could include being debt free before age 35, dedicating 25 percent of your income to savings, donating a certain amount of your salary to a noteworthy cause or charity, or retiring by 50.

“Almost 80% of Americans say they live paycheck to paycheck, many not knowing how big their next one will be.”

After you establish your financial values, you can determine your financial priorities, which are essentially your financial goals. Depending on your circumstances, these priorities might be small-scale, like spending less money on take-out or cancelling under-used memberships, or large-scale, such as repaying all debts within five years or building an emergency fund. The foundation of minimalism is concentrating on what is significant and forgetting the rest. In order to do this, you’ll have to decide what is and is not important to you.

Use the 90/90 rule

In an effort to help people make smarter decisions about their material possessions, Joshua Fields Millburn and Ryan Nicodemus, founders of the popular blog The Minimalists, established the 90/90 rule. Look at any object you own. Have you used that item in the last 90 days? If not, will you likely use it in the next 90? If the answer is “no,” it’s time to let that object go. And while it might be easy to say goodbye to stained t-shirts and neglected kitchen appliances, it can be difficult to part with objects that once held sentimental value. In “Tidying Up,” Marie Kondo insists that honing in on the belongings that mean the most to you can simplify this process.

“Everything you own wants to be of use to you,” she states. “To truly cherish the things that are important to you, you must first discard those that have outlived their purpose.”


What minimalism isn’t

In theory, the money you save by buying fewer things can be used to resolve outstanding debts or stashed away for future use. A quick YouTube search will produce thousands of testimonials from people who have used financial minimalism as a means to pay off student loans or to start planning for retirement. But there are plenty of skeptics who are quick to highlight that minimalism is by no means a flaw-free principal.

Many critics assert that minimalism is a lifestyle that only the rich can afford to pursue. If a wealthy person discards something because it doesn’t “spark joy,” but they end up needing that object six months later, they can simply buy it again. Most introductory guides to minimalism will encourage consumers to invest in quality over quantity, insisting that a $200 pair of jeans are more durable and will last longer than a pair priced at $40. This may be true in theory, but this type of thinking alienates consumers who might not be able to afford the price tag associated with luxury items. In fact, almost 80% of Americans say they live paycheck to paycheck, many not knowing how big their next one will be. While these individuals may benefit from minimalism’s core principles, they are far more likely to keep buying replacement pairs of $40 jeans because they may not have the cash to invest in a garment that could potentially last longer.

So, will practicing minimalism actually improve your finances? Yes, but it’s a slow burn. If you’re looking for instant gratification, you may want to try something more extreme like a 30 day financial cleanse. And even if you’re of the mindset that minimalism is nothing more than a fad, it’s hard to deny the benefits of reducing clutter, minimizing distractions, and being more mindful about your consumption.


At N26, we believe in the power of simplicity and intentional design. Each and every screen in our app was developed with you in mind. Want a sneak peek? Join our waitlist for early access.

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Chad Hensley

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N26 US Magazine

N26 is coming to the US

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