Hello Friends! I hope all of you are doing well today! I just wanted to express how grateful I am for everyone that is viewing my posts, following me, liking my posts, commenting on them, and just interacting with me in general; it makes my day when I see that I made a change someone’s life. Today, we are going to be talking about financial philosophies like Minimalism, Frugalism, Valuism. Each of these philosophies have their own distinct qualities but also share some common ideas. Most people in today’s world are consumerist; people who buy and acquire things that they can’t fully afford. They acquire these things either to justify their own personal worth or just to impress other people. It’s the reason why people are plagued with debt and financially instability for the most part. People just keep spending, and everyone encourages it. The more money people earn, the greater they spend. To me, I think there are two types of consumerist. The financially literate one and the financially illiterate one. The financially illiterate consumerists acquire things that eat up most of their income; they buy things they don’t need and can’t afford just to impress people. We see millionaires, billionaires, and financially savvy people have a lot of nice things. The main thing to note is that they have really low expenses compared to their total income; that’s what I consider a financially literate consumerist. They buy nice things only after they invested their money and multiplied it exponentially to the point where their money makes them even more money. With all of that being said, let’s dive in friends!
Minimalism is based off of the principle of “Living with less.” You declutter your life from the non-essential things, so that you are able to make room for the things in life that you care about the most. It’s about having the least amount of financial obligations possible so that you don’t feel stressed or worried. It’s one approach to living a financially free life. Minimalist don’t want the luxury cars, name brand clothes, or the big houses because these things usually come at a hefty price – their time. They don’t want the top of the line everything because they usually come with expensive financial obligations. To minimalists, they think that there is no point in having the nicest everything if they have to be constantly working and stressed just to be able to afford them. Instead, they would rather cut out material possessions and reduce financial obligations, so that they are able to pursue their passions or have more time to spend on things that they want to do without the stress of having a lot of financial obligations. Imagine that you have an expensive car or house or both, and you lost your job. How will that affect you emotionally, spiritually, and mentally? If you don’t have other sources of income, you might have to sell the house and the car just to be able to pay back the loan. Minimalists are also able to choose their careers more freely even if the pay is low because they don’t have the amount of financial obligations that some other people have. Depending on their mindset, they can be anywhere on the spectrum. They can be extreme and get rid of the majority of their things or they can be looser with it and just get rid of things that are luxuries or not essential. The overall mindset is don’t get stuck paying an insane amount of financial obligations at the expense of your health but instead simplify your life and live the life you want.
Frugalism is the philosophy of saving money, of being economical, and saying no to overly expensive things that can be bought at a cheaper price. Being frugal is all about changing your mindset to buy things at good prices and avoid any unnecessary expensive things. You could say that frugalists want the “best bang for their buck.” Frugalists don’t want to pay full price for a variety of things if they know that they can get the same thing at a better price. For example, being frugal might have you shopping at thrift stores where you can get discounts on clothes or other items. Another example would be to buy the generic brands of the food you get instead of buying the name brand stuff. Contrary to popular belief, you still spend money as a frugalist, but you also try to save where you can. People think that being frugal is like being cheap; this is completely wrong. Being cheap is not wanting to spend money at all for any reason even if you will like it or need it. Being cheap would mean not buying band aids because you don’t want to spend the money. There is also a difference between being cheap and being not able to afford it. Being cheap is having the money and not buying them even if you need it and not being able to afford it means you don’t have the money to buy it. I’m going to use the same example of band aids to show you all how a frugal person would approach this. Let’s say they actually need band aids. A cheap person would have the money and not buy them and just let the wound be open, but a frugal person would buy the generic brand band aids instead of the brand name band aids, thus, saving them money. They might be able to get away with medical gauze and tap, but that might be in the grey area of being frugal or cheap. It could go both ways.
This is closely related to the other financial philosophies but then again, they all are similar in some way or another. This philosophy is based on the principle of spending your money on what you truly value; It means spending money where you spend your time. This could mean spending money on your family, religion, education, or something else that you truly value and spend your time. This philosophy could get misunderstood very easily. People could just say “well I value these expensive clothes and expensive steaks.” That could be true, but this is one of the grey areas in this philosophy. You could easily get carried away with spending without realizing it, and you always try to justify it by saying “I value this.” In order to be successful in this philosophy, you would have to soul search and find where you spend your time and what you value. You need to find your inner values in order for this philosophy to work effectively. Let’s say that you love traveling and you love spending time with your family, going on a vacation with your family would be a good idea since you value both. Where things would get blurry is if you started spending money on unnecessary upgrades and features that you didn’t need.
Which one should I choose?
Mr. Nahas, there are a lot of choices, which one should I choose? That is a great question! It all depends on your financial goals and your personality! If you are someone who can live with less, choose minimalism. If you enjoy shopping deals and finding bargains, choose frugalism. If you want to spend your money on the things that you enjoy the most and cut out stuff you don’t, choose valuism. It is also possible to choose a combination of two or all three. I don’t need the nicest clothes, nicest jewelry, nicest shoes. I don’t need to eat out every day, eat fancy meals, or get that Starbucks coffee every day. I don’t value those things; however, I do like vacations and cars. I don’t mind spending some money on a vacation that will make me happy. With that said, I don’t need the fanciest hotel (a quality hotel at a bargain price will do), nicest rental cars, or to splurge on unnecessary things when on vacation, I am content without getting souvenirs because the memories and experiences are saved in my mind. What I just described is a mixture of frugalism and valuism, I spent money on the thing I valued, which was the vacation and saved money wherever I can. I also live a somewhat minimalistic life because I don’t have a lot of clothes, possessions, shoes, jewelry, expensive things, or other knick knacks. The point is to choose the philosophy that works for you. You need it to satisfy your financial goals, investment strategies, and your happiness. There is also no point in having a lot of money if you aren’t happy; however, happiness differs from one individual to another. It’s like a diet; you can have some things only in moderation. One last thing to note, these strategies work because people live well below their means. Their income greatly exceeds their expenses. If you see a financially literate and financially savvy person have nice things, it’s because their income greatly exceeds their expenses to the point where they can afford to buy all the nice things a couple times over.
I hope that all of you gained some knowledge about the different financial philosophies that people follow. You don’t have to follow any of these necessarily, just make sure that your income greatly exceeds your expenses; that’s really the core value in all of these financial philosophies. It’s a framework to help people save money and to spend it wisely. If you have any questions or need me to clarify anything, post a comment and I will reach out to you as soon as I can. Thank you, friends, for stopping by!
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