I live on €1500 a month as a financial minimalist
I’ve learned a new term: Financial minimalist, and I am one. I never really thought of myself as a financial minimalist, but ever since I got to know this term, I realized it’s totally me. And it’s not because of greed, being a cheapskate or not willing to spend money. For me it’s all about making money, saving it and then turn it into more. I also don’t need as much as I sometimes think I do, so I’d rather keep my money in the pocket most of the time. That’s why I live on €1500 per month, let me tell you how or check the video.
Let’s check the expenses
Yes, the amount of money you have to spend depends on where in the world you live. For context, I live in the Netherlands which is located in Europe. I’m single (and ready to mingle), and I used to live with my dog who passed away in November. I now have no one to take care of but myself. So yes, I can keep those expenses down a bit easier than people with families. However, I grew up in a family where there sometimes wasn’t enough money. Therefor I know what it’s like to live on a budget, even with a family of five people and three dogs.
But enough about that, let’s talk about me! Just kidding, here’s a list with all my expenses. I’ve decided not to mention the prices for the services, because it’s very different per country and I don’t want to give you a ‘bad’ reference for your own budget. You should create a realistic budget based on pricing in your country. Here’s my list:
- Rent, water included
- Mobile phone
- Insurance for health
- Insurance for liability
- Drinks and food
- Gas and electricity
- Gym membership
- Student loan
- Old computer loan
This totals up to €1320,81. Which leaves me with €179,19, an odd number to spend on myself. I usually put €150 in my savings account. Or I use this money to cover my public transportation and fun-time-costs like dinners and movies.
Income versus outcome
When I worked in retail, I was making €1400 at the most, even if I was a store manager. I was a lot younger back then, but even with all of my experience I wouldn’t be making much more anyway. It of course depends on the store, but retail pays pretty bad overall. I now make at least three to four times this amount with my own company, but I only pay myself €1500 per month. I do this on purpose, because I want to make money and then turn it into more. I also don’t want to spend everything I have on stuff I don’t really need. That’s the minimalist in me.
As a financial minimalist I also look at the big picture. Where do I want to be in five years? Well, I would like to be a homeowner, travel more, work on my pension as an entrepreneur and hopefully have more fun experiences. I need money to do that, so I keep my eye on the prize. Whatever it is I want now, I think about it twice. Do I really need it and do I really like it? If there are two no’s in a row, I’m not buying it. This helps me save a lot of money, so I make more than I spend which is a basic rule of being able to save money.
How I save money
Apart from the €1500 I pay myself out of my company, I save everything else on a special savings account. For my personal life that is at least €150 a month. For my business it’s all the profit I have at the end of the month. Even within my business I spend and save like a financial minimalist. Mainly because I want to be in business for my entire life and not go bankrupt because I buy unnecessary stuff. I keep a budget for my personal life and business. I like knowing where I’m at financially, so I can also live a normal life when business is slow.
I also save money by getting rid of everything I don’t need. Things like magazine and tv subscriptions. I wrote an entire article on what expenses I took out of my budget to save money. I go through my income and expenses every six months to stay on top of things. I think this is a really good habit to have, as it helps you to stay on top of your money and make adjustments when necessary. The best thing I ever did was setting up an automatic payment to my savings account. Every month my bank automatically puts €150 in my savings account. I don’t even notice this because it has become so normal to me. It makes saving money very easy.
Do I always live on €1500 per month?
No, I don’t always live on €1500 per month because it’s simply impossible for me. We all have expenses like taxes, repairments around the house or holidays. As I’m my own boss I therefor sometimes pay myself a bit more. When I do, I go up to €2000 a month which gives me €500 more to spend. I think I do this about four times a year, I guess you can say every new season. It’s usually for necessary expenses or something fun like trips, dinners, or clothes for my capsule wardobe.
I might be a financial minimalist, but a girl needs to live! So no, I don’t go coo coo crazy if I go over budget once in a while. Money is to be enjoyed, not to be feared! Therefor I’ve spent about €100 on art supplies last month, around €300 on new clothes, shoes and make-up. Last year I’ve spend €150 on new nightstands. That’s after three months of not buying anything for myself and needing new nightstands for at least two years. This isn’t about justifying my spending though, it’s about showing you a realistic approach to money and spending it. You can’t your money to your grave, so you might as well enjoy it while you can.
Make necessary adjustments
I live on €1500 a month as a financial minimalist. Is this (always) possible for everyone? No, it’s not and it doesn’t have to be. I did not write this article for you to set the exact same budget. Keep it realistic for yourself and make necessary adjustments. I for instance, want to up my salary from €1500 to €2000 a month in 2020. Mainly because I have to start saving more on my personal savings account. The business is doing fine now, but I have to start thinking about my pension. As I don’t work for a boss, I have to take care of that myself.
I also want to live a bit more, I want to actually experience things and not just dream about them. This year I would like to go on a few short city trips. I’ve been working my ass of for the last five years, and I have only seen the insides of my house and office. That’s not healthy, so I will be investing more money in new experiences. Make necessary adjustments for your own life. Look at what you really need and want to achieve. Money is a means to an end. Don’t fear it, use it to create the life you want by spending wisely during times you can.
Would you say you’re a financial minimalist too or do you want to give it a try?