n a world where consumerism and excess are having a moment (blame Instagram!), a lot of people are turning to minimalism as a way to simplify their lives and focus on more meaningful things. It’s sort of like Marie Kondo-ing your finances! A minimalist budget helps you simplify things by prioritizing the expenses you can’t avoid and reducing unnecessary spending. Is a minimalist budget the one for you?

1. What is a minimalist budget?

A minimalist budget is a streamlined approach to managing your finances. It’s a lot like when you pare down at home—cleaning out your closet or your garage to simplify and get rid of things you don’t really need. It focuses on cutting out non-essential expenses and reducing spending to only what you really need. The goal is to eliminate financial clutter, save more money, and get more financial freedom. 

Minimalist budgeting can make you more conscious about spending; every dollar is allocated with intention, and unnecessary purchases are minimized. Instead of keeping up with the latest trends or accumulating more stuff, you focus on what really matters to you and lines up with your long-term financial goals.

Key concept: A minimalist budget is about quality over quantity—spending on things that add value to your life and cutting back on things that don’t.

2. Benefits of a minimalist budget

Reduces financial stress

By simplifying your budget and focusing on essentials, you’ll reduce financial stress. Fewer expenses mean fewer bills to worry about and a clearer picture of your financial situation. This can lead to a greater sense of control and peace of mind.

Increases savings and financial security

A minimalist budget helps you save by cutting out unnecessary spending. The money you save can be allocated toward building an emergency fund, paying off debt, investing, or reaching other financial goals faster. This increased savings rate can provide greater financial security and freedom.

Promotes intentional spending

With a minimalist budget, every expense is intentional. That helps you make better financial decisions and prioritize your needs. It makes you think critically about your purchases, which is a key to avoiding impulse buying.

Simplifies financial management

A minimalist budget reduces the complexity of managing your finances. With fewer categories and expenses to track, budgeting becomes simpler and more straightforward. This can save you time and make it easier to stick to your financial plan.

Supports a simpler, more fulfilling lifestyle

Embracing a minimalist budget often goes hand-in-hand with a minimalist lifestyle. That can mean less clutter, more space, and prioritizing experiences and relationships over material things. A lot of people find this shift leads to more overall happiness and fulfillment.

3. How to create a minimalist budget

If you’re considering adopting a minimalist budget, here are some steps to help you get started:

Step 1: Assess your current spending

The first step in creating a minimalist budget is to assess your current spending habits. Review your bank statements, credit card bills, and receipts to see where your money goes each month. You can also use an app like Brigit that tracks your spending by category.

Brigit tip: Look for patterns in your spending. Are there areas where you consistently overspend or buy things you don’t really need?

Step 2: Identify essential expenses

Essential expenses are the costs you truly need to maintain your basic standard of living. These might include:

  • Rent or mortgage payments
  • Utilities (electricity, water, gas)
  • Groceries
  • Transportation (car payments, gas, public transit)
  • Insurance (health, auto, renters/home)
  • Debt repayments

Make a list of your essential expenses and calculate the total amount you need to cover them each month.

Brigit tip: Consider what expenses are truly necessary and eliminate any that are not. For example, you might decide that a gym membership is not totally necessary if you can exercise at home or outdoors.

Step 3: Eliminate non-essential expenses

Once you map out your essential expenses, look at those non-essential items on your list. They’re the expenses for things you don’t need to meet your basic needs. Examples of non-essential expenses include:

  • Dining out and takeout
  • Entertainment (movies, concerts, subscriptions)
  • Clothing and accessories
  • Hobbies and fun activities
  • Gadgets and tech devices

Eliminate or significantly reduce these non-essential expenses. Focus on cutting out items that don’t bring you genuine happiness or value.

Brigit tip: If you find it challenging to cut back on certain non-essential expenses, try a spending freeze for a month—you might be surprised what you can live without!

Step 4: Prioritize savings and debt repayment

With the money you save from cutting non-essential expenses, prioritize savings and debt repayment. Allocate part of your income to build an emergency fund, contribute to retirement accounts, or pay down high-interest debt. This helps improve your financial security and set you up for long-term success.

Brigit tip: Automate your savings and debt payments to make sure you consistently allocate funds to these priorities each month.

Step 5: Track your progress and adjust as needed

A minimalist budget requires regular monitoring and adjustments. Track your spending to stick to your budget and make progress toward your financial goals. If you find certain expenses creeping back in, reassess their importance and adjust if you need to.

Brigit tip: Use a budgeting app like Brigit, or a spreadsheet to help you stay organized and monitor your spending.

4. Is a minimalist budget right for you?

While a minimalist budget offers many benefits, it may not be the right fit for everyone. Consider the following factors to determine if a minimalist budget is right for you:

You’re Looking to Simplify Your Finances

If you’re overwhelmed by managing expenses and categories, a minimalist budget can simplify it all. It reduces the complexity of budgeting and helps you focus on what matters most.

You want to reduce financial stress

A minimalist budget can help reduce financial stress by focusing on essential expenses and cutting out unnecessary spending. If you’re looking to regain control of your finances and reduce anxiety around money, this is a good approach.

You’re motivated to save more and spend less

If you’re committed to increasing your savings rate and spending less, a minimalist budget can help you reach those goals. It encourages you to be intentional with your money and prioritize savings over non-essential spending.

You’re willing to make lifestyle changes

Adopting a minimalist budget often means lifestyle changes, like cutting back on dining out, entertainment, and shopping. If you’re willing to make these changes and embrace a simpler, more intentional lifestyle, a minimalist budget could be a great way to go.