What Is the Minimalist Money Mindset?

Senior couple sit in the doorway to their camper van while taking a break from driving. The couple is on a road trip in celebration of recently retiring. The ethnic woman strums a ukulele while singing her husband a song. Her husband is affectionately looking at her. He is holding a coffee cup. A portion of the interior of the van is visible. It is cloudy outside. The couple is dressed in casual clothing and the woman is wearing glasses.
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Tiny homes are the physical embodiment of the minimalist mentality. Just enough space — no more — and just enough stuff, as well. No room for clutter, no place for material excess. 

The minimalist money mindset is nothing more than a tiny house for your cash. 

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Money minimalists seek for their finances the same thing tiny house owners seek for their personal living space — an orderly and organized system where everything is accounted for, nothing is wasted and the minimalist ends up happier and more fulfilled with less.

Money Minimalism: Less Is More

Minimalists get rid of excess objects, items and physical merchandise with a religious fervor. To outsiders, it appears that they’re obsessed with the idea of living with less and less. To the converted, however, each purge doesn’t leave them with less. It makes room for more — more things that really matter, even if it’s just empty space. 

The same concept applies to money minimalism — only instead of ridding your life of excess objects that bring you no real joy or add no real value to your life, you’re jettisoning superfluous purchases and expenditures, instead.

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Read: Why Now Is the Time to Downsize Your Home

The Real Goal of Money Minimalism Is Freedom

Joshua Fields Millburn and Ryan Nicodemus are known as “The Minimalists.” Their brand includes a podcast, books and even a few Netflix films. Together, they boast an audience of more than 20 million people who are desperate to dig out of their all-consuming clutter — and that clutter extends to their finances.

Whether you’re talking about money or the merchandise it purchases, the goal of minimalism is the same: freedom. Consider the following series of hypothetical purchases made by Millburn on TheMinimalists.com:

“Now, before I spend money, I ask myself one question: Is this worth my freedom?

  • Is this coffee worth $2 of my freedom?
  • Is this shirt worth $30 of my freedom?
  • Is this car worth $20,000 of my freedom?

In other words, am I going to get more value from the thing I’m about to purchase, or am I going to get more value from my freedom?”

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Money not spent, the theory goes, represents freedom because money can be converted into experiences, into gifts for loved ones, into a secure and independent future or into the pursuit of passions. Cars, coffee and shirts, on the other hand, cannot. 

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Identifying ‘Absolute Expenses’ Is the Foundation of Money Minimalism

In order to maintain healthy finances, you have to earn more money than you spend. As Millburn wrote in a different essay, people tend to spend more money when they make more money, so no matter how much a person makes, money stress follows them wherever they go. 

Money minimalism is a different mindset that has nothing to do with income. Regardless of what they make, money minimalists group all expenditures into two categories: absolute expenses and everything else. Absolute expenses include things like: 

  • Savings
  • Rent
  • Utilities
  • Insurance 
  • Food
  • Necessary clothing 

These are the kinds of things you must spend money on to function as a human being in the modern age. It’s an incomplete list, and less-stringent minimalists might include things like cellphones and internet service, but your list of absolute expenses should be a short one.

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Every off-list dollar you spend, according to the money minimalist mentality, is a choice — a choice of stuff over freedom.

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Purchases Never Made Are the Minimalist’s Rewards

According to money minimalists, those three or four overlapping streaming subscriptions you’ve piled up, the countertop appliance that takes the cooking out of cooking and the air freshener that clips to your car’s AC vent have all robbed you. Remember, they haven’t robbed you of money. They’ve robbed you of freedom — the freedom to pursue the things on the second all-important list in your life: your list of passions.

Just as your absolute expenses are a list of things you must spend money on, according to the money minimalist, your list of passions are the only things you should spend money on — at the expense of just about everything else. 

That might be overseas travel, feeding the homeless, starting a business or going to the movies every single day, if movies, travel, entrepreneurialism or charity are your driving passions. Every single dollar you spend on things that don’t appear on one of those two lists — your list of absolute expenses and your list of passions — is money wasted and freedom forfeited.

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Last updated: July 23, 2021

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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