The concept of minimalism is an ancient concept followed by our ancestors. As years passed by, people changed, along with that their lifestyle and their preferences also changed. An increase in lifestyle expenditure was noticed which reached its climax during the 2008 financial crisis. The 2008 crisis among other things, have taught us the importance of debt management Most of us in some way or the other deal with debt on a regular basis;

  • So is it right to say that, “Since the amount owed is very small, one can take this financial obligation lightly?”
The answer is a BIG NO!

This is a wrong attitude towards debt management. No matter how small or large the debt is, it’s still a debt, you still have to give away some of your hard earned money A small debt in no time grows to become a large debt, similar to a cancer disease which slowly spreads throughout your body if not cured on time.

  • So how do I deal with debt?

Simplest answer: Increase earnings (via investments etc) while curbing your spending. This’ll help you clear off your debt and also earn money at the same time. Making changes to your lifestyle is the best way to start your journey towards better debt management. So how do I make changes to my lifestyle expenses? Simple- practise minimalism and frame a budget according to your needs.

  • What is ‘Minimalism’?

Minimalism means simplifying. It puts emphasis on intentional or conscious thinkingbefore committing any act of purchasing. It focuses on purchasing only those items which can add value, which is necessary or rather important in our lives rather than purchasing just for the sake of it. It’s an individual centric concept and can be shaped according to one’s needs.

  • Minimalism and Debt:

A majority of us, especially youngsters in their early 20’s, the period when they begin earning, don’t think twice before spending. There is no one to guide them that this is the best time for them to invest their money so that they can reap benefits of such investments at a later stage. Instead, what most youngsters and even people in late 30’s do is, spend their money on those things which give them temporary pleasure.

For example: I own an iPhone 7 model. iPhone X model gets launched, during the same period I also earn my first salary. I wish to purchase the latest iPhone model but I don’t have the due amount to purchase it. However I’m still determined to make that purchase and apply for the EMI option. In this way, not only have I spent my hard earned money on some material possession which is sure to get replaced a year later but I’ve also started my journey in the debt world. All of this for a moment of pleasure! Material possession somehow becomes an end rather than means to live happily which is obviously a false belief.

Therefore by practising minimalism you will be encouraged to become more mindful of your purchases. Once you do this, you’ll notice that you now have more money than before to spend on essential things, to invest and even to clear off debt. Minimalism is not anti-consumerism. It just focuses on distinguishing between need and want, between frivolous and significant, between deliberative and impulsive purchasing.

Nikhil Singhi

  • What to do?

The next time you want to purchase something, attach the item’s worth with the amount of time you’ve spent to earn that money.

For example: You earn Rs. 1000 per day (Rs. 30,000 per month). You wish to purchase an item which costs Rs. 3,500, which equals 3.5 days of your hard work.

Ask yourself, “Is this item really worth 3.5 days of my hard work?”

TRUST ME, THIS WORKS!

If you’re in debt, focus on clearing off that debt. In order to achieve that, if you even have to reduce your expenditure for a certain period, do it. Debt no matter how small or big should be taken seriously. Rid yourself off debt before falling into a debt trap.

Don’t keep your money idle. While aiming to clear off your debt, continue to look at different sources of income to make money back for you.

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