The US economy is 70% driven by consumers who are all looking for ways to be debt free. The more people spend and buy, the better the economy will be. A Gallup.com survey revealed that as the consumer spending in the country goes up (currently at $98 as a daily average), that is good news for the economy. It shows that Americans are confident about their finances – more than they had been in the past few years.
However, that does not mean the economy is asking consumers to throw caution in the air and buy items left and right. It will not help the economy in the long run if people purchase a lot of items and and are unable to meet the payments. Getting in debt is a big possibility if purchases are made on a whim.
Some people say it is better to spend two dollars for a one dollar item that you need rather than spend one dollar for a two dollar item you do not need. Smart spending is at the core of US economy. Stopping altogether with consumption could be the end of the economy. But at the same time, smart spending and careful expense budgeting is the key in moving forward.
This is where minimalism comes in. Sometimes referred to as life hacking, frugality or simple living, being a minimalist comes down to being able to focus on what is important. But this is not about eating on the floor and dumpster diving. Even a frugal lifestyle can be fun and minimalism can be just the same. It is also a very real solution to a very real problem. There are successful people who took on a minimalist lifestyle and became debt free.
Finding debt freedom through minimalism
There are people who took on being a minimalist and even has the results to show that it is possible to pay down debt with this particular mindset. One such story is of an olympic rower Rachel Jonat who was staring down at $82,000 in debt with her husband. Using a minimalist approach, they were able to pay everything down in just one year and seven months after they started. Below are their learnings from the experience as shared by Businessinsider.com.
Recognizing the problem
The number one point in trying to be debt free is recognizing the problem and the source of it. For Rachel, she admits that debt has been a way of life from the time she was 17 and got her credit tool. She has been charging expenses and as an olympian, she racked up these items quickly. She had a dream of going into the olympics and participating as a rower.
Rachel was able to pursue her dream while the financial obligations that came with it was left for the credit cards to handle. She was charging items to her card and at one point, her mom even took out a second mortgage on their house just to help out. This is not the usual circumstances where you take out a second mortgage but they did it just the same and debt just became a part of their life.
Even after Rachel got married, they all charged the expenses on their credit card. This will take them back in their attempt to be debt free but it was already done. It was only when they had to renovate their home where they able to sit down and look at their expenses and debt. This is when they realized that they have racked up debt that they do not know what to do.
Minimalism can be a debt solution
Among the other debt solutions out there, the family opted to makeover their lifestyle entirely by letting go of consumerism and becoming minimalists. Here are the reasons why this lifestyle helped them get rid of their debts.
- It opened their eyes about the role of “stuff” in their lives. Rachel initially got into the idea of minimalism when her sister sent her links to articles about it. She was skeptical at first but she soon realized that it is not about the number of stuff – it is about the idea of the stuff “owning” you. When they own you, the compulsion to have a lot of “stuff” becomes a measurement of your success.
- It promotes frugality. Frugality can help change lifestyles just as minimalism can be a great help in reaching your objective of being debt free. Being frugal is similar to minimalism in the sense that it encourages you to to focus on the important things. It is not about the quantity but the quality of what you own.
- It taught them how to choose the things they need to sacrifice. When the couple decided to change their lifestyle, they just had their first child. They were honest enough to admit that it was not an easy adjustment but it made them more determined to identify the things in their lives that they can sacrifice. For instance, Rachel decided to sell her wedding gown. It was very painful but when she found the perfect buyer and glimpsed how happy the bride-to-be was, she realized it was easier to let it go. When she did that, it became very liberating. It became easy to let go of the other stuff as well.
All of these helped the family break free from the clutches of material possessions – especially the need to amass a whole lot of them. Since the compulsion to buy is no longer there, you are able to free funds to help you pay off your debts a lot faster.
Do you have what it takes to eliminate debt and be a minimalist
Towards the end of the article, the Jonat family revealed that although they credit minimalism in being debt free, it was not without any challenges. This is why you need to understand minimalism completely so the changes that will happen to your life will be more acceptable.
There are three important truths about being a minimalist.
- You have to change your perspective. It is on how we see things that can propel how far we can go. We need to change our outlook on life and see that minimalism isn’t deprivation of material possessions, it is discerning what is essential in your life and leaving behind those that serves no purpose.
- You need to find what is important. Having focus and knowing your goal is an important aspect of minimalism. You need to put your goal on top of mind and everything you do should push you towards that direction. In this process, you get to appreciate the more important things in life. It can be more time to pursue your passion of reading and writing rather than being glued to the TV. Eliminating the clutter gives you focus and clarity.
- You learn to put money in its rightful place and role in your life. You start to see money as a tool and not as a master. Minimalism makes you realize that you need to be in control of your money – not the other way around. Once you do that, you will find yourself more in control of your financial decisions. It will give you that initiative to spend not based on what you can afford, but what you really need in life.
Here is a video of Graham Hill as he talks about how less makes you more happy. He gives three important steps to help you achieve a minimalist lifestyle. It is not about how much you own but how much room you have for the important stuff.