Can Minimalism Lead to Financial Freedom?

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When Milana Perepyolkina moved to the U.S. for college, she arrived with two bags. The first bag contained her pillow. The second held a cup with a spoon, a dictionary and some clothes. 

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In the years since her arrival, Perepyolkina, the author of “Gypsy Energy Secrets: Turning a Bad Day into a Good Day No Matter What Life Throws at You” has maintained a minimalist lifestyle, living true to her roots. 

“I am Gypsy by nationality,” Perepyolkina told GOBankingRates. “Gypsies have traveled in a small wagon for centuries. All family possessions were in this small wagon. Everything was impeccably clean and well taken care of. Every possession mattered and had a history.” 

Perepyolkina has modernized the Gypsy tradition by exchanging apparel rather than buying new clothes off the rack, keeping a clear and clean room (which she finds lends itself to clear thinking) and imagining each item in her house as alive. 

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“Items that I love emanate positive energy,” Perepyolkina said. “Items that are broken, not loved and not used emanate negative energy. This inspired me to practice a minimalist lifestyle: I simply can’t take good care of too many items.”

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Taking a minimalist approach to living not only enriches Perepyolkina’s personal life, it rewards her financial one, too. 

“I quickly realized how much money I saved by not buying unnecessary things,” Perepyolkina said. “What did I spend it on? A trip to Hawaii! I created memories, not clutter.”

Perepyolkina sets a good example of how the philosophy of minimalism can liberate one from the clutter and costs of constant consumerism. The minimalist approach is lauded by financial and lifestyle experts who connect the dots between buying more than you need and spending more than you should.

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The Math of Minimalism Is Easy

“There are two paths to financial freedom: You can buy all you want or learn  to need less,” said Andrew Latham, certified personal finance counselor and managing editor of, adding that one way to streamline your needs is to apply the Pareto principle (also known as the 80/20 rule) to your everyday life and purchases. 

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“Clothing is a good example: On average, we wear 20% of our wardrobe 80% of the time,” Latham said. “The average household spends approximately $1,800 a year ($150 a month), according to the latest data from the Bureau of Labor Statistics, [on apparel]. Paring the size of your wardrobe to 20% of its current size could save you $1,440 a year. If you invest that money in your retirement fund, you would have more than $92K after 20 years, assuming a 10% return rate. A smaller wardrobe will also save you time because you will spend less time on laundry, shopping, and deciding what to wear.”

Taking a minimalist approach can obviously save you money, but how do you actually embrace this mindset to reap the financial benefits? Here’s a look at what the experts recommend. 

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Know the Difference Between a Want and a Need

“Many people today want what they want when they want it regardless of the long-term negative effect it will cause them,” said Nancy D. Butler, a certified financial planner, author and business coach. “A need is food, clothes, a roof over your head and other necessities. But that does not mean brand name or designer clothing, eating out at the best restaurants or owning or renting a home above your means. It does mean living today in a way that enables you to save enough money to have a good life in the future, including when you are [retired].”

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Look at Your Life From the Outside

Benjamin Bush, a financial advisor with Northeast Sequoia Private Client Group, recommends those seeking financial freedom via minimalism to look at their lives from the outside. 

“You can doubtlessly identify excessive spending and downright waste,” Bush said. “Imagine the financial freedom you could have achieved if you had saved rather than spent resources on things you wanted but didn’t need. You can’t recover past waste, but a minimalist lifestyle could make your future better.”

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Declutter and Sell

“Minimalism can look different for everyone, but the main component is to live with less,” said Laura Durenberger, founder of the eco-minimalist blog Reduce, Reuse, Renew, and the podcast Raising Eco Minimalists. “Living with less can [mean] decluttering your space to get rid of things you don’t use or that you don’t enjoy.

“You can sell some of the items and make money that can go in savings or towards debt,” Durenberger said, adding that her family has sold over $2,500 worth of items on Facebook Marketplace. “We also have gifted many items through local community groups (including the Buy Nothing Project.”

Shop With Intention

“Uncontrolled spending is one of the main reasons that a lot of people struggle to manage their budgets, but the very point of minimalism is to only buy what you actually need,” said Anna Barker, personal finance expert and founder of LogicalDollar. “This means that the purchases you do end up making will be a lot more intentional. That is, you probably won’t be buying something because it popped up in a marketing email, with the result being that you have much better control over your spending.”

Check Out: Shopping Mistakes You’re Making and How To Stop
Read: 10 Signs Your Spending Is Out of Control — and How To Address It

Think About the Savings — and the Sigh of Relief

“Consider how it would feel to remove the excesses from your life,” Bush said, noting, however, that the promise of financial freedom alone might justify a minimalist future.

“How much money could you save? What else could you create with resources otherwise wasted? Minimalism’s rewards include more financial freedom, not less. The amount you save from the wants in life gives you the opportunity to support your actual needs.”

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Last updated: Aug. 17, 2021

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About the Author

Nicole Spector is a writer, editor, and author based in Los Angeles by way of Brooklyn. Her work has appeared in Vogue, the Atlantic, Vice, and The New Yorker. She's a frequent contributor to NBC News and Publishers Weekly. Her 2013 debut novel, "Fifty Shades of Dorian Gray" received laudatory blurbs from the likes of Fred Armisen and Ken Kalfus, and was published in the US, UK, France, and Russia — though nobody knows whatever happened with the Russian edition! She has an affinity for Twitter.
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