How to Get Rich with Minimalism

I few weeks ago, I read a post about how 20 years of minimalist living can make you a millionaire.

It's not a get-rich-quick plan, but unlike many financial schemes, it's a sure bet.  Author Joshua Becker of becomingminimalist.com uses conservative figures to make it clear that minimalism can save you a lot of money which, reinvested over time, can make you financially independent.  It's useful to see the details spelled out, which I didn't do in my post How Minimalism Has Made Me Rich.

Not the people you want to follow

A 2017 Pew Research study found that 54% of Americans spent more than they earned every single month.  While the personal savings rate increased in 2020 when people needed to stay at home, a surge of spending and debt began again once COVID-related restrictions were lifted.  It's safe to say that even more people are over-spending today, paying for their lifestyles with ever more credit card debt.

When the Joneses spend more than they earn and save less than they need, keeping up with them is a terrible idea.

It's a good thing minimalism is about more than decluttering.  It's much more than a sleek, modern aesthetic.  Minimalism can change your entire life, and one major aspect of that is financial.

Becker writes about many of the ways that minimalist choices can save money, including smaller housing, utility, maintenance and insurance costs, smaller wardrobes, and reduced spending on non-essentials (particularly eating out and excess gift-giving).  But there's more we can consider.

4 additional minimalist monetary differences

1.  Reduced furniture and décor costs

Americans spend an average of $318 per month on furnishing and operating their homes.  This $3,816 per year covers everything from dry cleaning to landscaping and pest control services, from new bath towels to a new chandelier for the dining room, and from wallpapering the living room to a new washing machine.  Some of these are necessities and some fall under the category of "nice to have."

With care, creativity, some DIY, and a smaller home, these costs might be reduced by 25%, saving $954 per year.

2.  Reduced auto costs

According to Kelley Blue Book data, the average price for a new car in June 2024 was $48,644.  Since most new cars depreciate 35% in value in the first three years, you could buy that vehicle for $31,619 slightly used.

But even if you want a new car, you don't have to spend over $48,000.  There are many excellent cars that cost far less, including the 2024 version of my current vehicle, which sells for less than $22,000.  Even if you can afford to buy an expensive car, driving something more modest makes a strong statement about your values.  With savings of between $1,600 and $4,433 per year, it's worth thinking about.

Additionally, every month you keep a paid-off car puts hundreds of dollars in your pocket.  At some point an old vehicle costs more to repair and maintain, but until then you can save a lot of money before you have to buy its replacement.

And choosing to own just one car is a real game-changer.  Saving an entire car payment, plus insurance, gas, and maintenance, can make a huge difference to your budget.  You also gain:

• health benefits of walking or riding a bike for quick errands
• the camaraderie of ride-sharing
• time to relax and recharge as you use public transit

3.  Reduced costs for entertainment

According to recent research, the average American spends $3,568 on entertainment each year, which is about $297 per month.  Many financial advisers say that most people who are struggling financially do so because they have overspent in one of three ways:  too much house, too much car, or too much entertainment.

My husband and I enjoy going to the theater, which is not a cheap entertainment option.  But I reduce costs by

• pursuing minimalist hobbies
• subscribing to just one streaming service
• cutting magazine subscriptions
• borrowing books from the library or buying them used
• choosing to see a handful of movies on the big screen instead of going once or twice a month
• rarely buying apps or games
• completely ignoring the lottery

Instead, we treated ourselves to three shows this year.  They were fabulous productions and we truly enjoyed them.

The average concert ticket price in the U.S. is $123, which is less than the average NFL ticket price of $378.  None of that includes parking, refreshments, or merchandise.  It would be easy to spend a lot of money, but let's be conservative and say you go to one of these events every couple of months.  Go every three months instead and you'd save $246 to $756 every year.

In fact, in totaling what my husband and I spent for entertainment in the past year, I'm going to go out on a limb and say that it's possible to cut these costs by at least 1/3 and still have a lot of fun.  That saves $1,189 per year.

4.  Reduced education costs

I value education, and I'm grateful for mine.  I have a Bachelor of Music degree with a minor in English, and I earned a California teaching credential in graduate school.

But I went to my state university and graduated with no debt.  My daughter, who has a BA in linguistics with a minor in Early Childhood Education, plus a TESOL (Teaching English to Speakers of Other Languages) certificate, and my son-in-law, who has a BS in Biochemistry and Molecular Biology, plus a Clinical Laboratory Scientist license, did the same.

According to earnest.com, today's students borrow an average of almost $37,000 by the time they earn a degree.  Now, if you compare that to buying a car (see #2), it may be a good investment.  But the New York Federal Reserve reports that about 1/3 of all college graduates are stuck in low-wage jobs.

We question whether an 18-year-old should "waste" time in a community college, even though they can take the same classes a freshman at Harvard would take, probably taught by a PhD instead of a graduate TA, and all for far less money.  My daughter and son-in-law both started at our local community college, and finished all of their general education requirements while continuing to live at home.

And college isn't the only path to success.  For example, a two-year program in physical therapy assisting or web development, or an apprenticeship as a plumber, welder, or electrician could lead to a great career and a good salary.

By being more thoughtful about career choices and optimizing the path to a degree, you could probably save at least 1/3 of the average student loan repayment of $503 per month, paying $335 instead, and saving $2,016 per year.

Financial freedom

I'm not suggesting that minimalists should give up what they love.  But by making thoughtful choices, we can waste less money and fund what we care about.

Contrary to what our culture tells us, cutting back on non-essentials is not a sacrifice, but a gift we give ourselves.  By my conservative estimates, these four minimalist choices could save you between $5,759 and $8,592 every year.  That's money you're free to use for what truly matters to you, whether that's travel, extreme generosity, or more savings and investment (getting you to that millionaire mark even sooner).

That kind of financial freedom is truly life-changing.

P. S.  Here's a link to that post about becoming a millionaire that I read on Joshua Becker's Becoming Minimalist.

Minimalism doesn't mean lack and deprivation.  Minimalism is a tool that can help us find happiness by steering us in the direction of what we truly desire.  As we let go of financial clutter, we have more resources to accomplish the things we really care about.

My book, Simple Money,* can help you:

• discover your money beliefs and how they influence your financial decisions
• buy less and demolish debt
• make a budget that lets you focus on your needs and find a way to afford your desires
• feel empowered, not poor, as you control your spending
• increase enjoyment and satisfaction without spending money
• and more!

We work too hard to wonder where all our money went.  Life is better when we use money to achieve our dreams, and Simple Money can help you along the way.

* This blog is reader-supported.  If you buy through my links, I may earn a small commission.