Nick Ang

Minimalist personal finance

Matt D’Avela is a filmmaker and rising YouTuber who has managed to build a community of people who are or aspire to be minimalists. 

Recently, he published a new video in which he shared how through minimalism, he came up with a simple rule for managing his personal finances. I really like it:

Spend less than you make.

True to the minimalist philosophy, it’s simple and completely logical. And as with all things that are simple, they are only simple when said, not done. Mixing in the messiness of being human makes everything much more difficult.

Spend less than you make and you’ll be fine. Why? Because you’d have the freedom to take risks and completely eliminate the stress of living pay check to pay check.

But we live in a world of hyper-personalised advertisements on Facebook, Instagram, YouTube, Google… Oh, and lest we start pretending, we are not always rational.

I recently bought a new Macbook Pro for my wife as a birthday gift. That’s a significant portion of my pay check, and I will be doing the accounting for my expenses next month and I bet I’d have spent more than I earned or come really close to it.

What am I supposed to make of this? Sure, we don’t make these big one-off purchases that often, but really, when we take a look each month in hindsight, we actually do quite often! Travel is a big one for us and it recurs often.

That said, the beauty of a simple rule like this is that it’s hard to forget and easy to remind yourself to try and follow it. Try, we must.

Wednesday, 15 August 2018, sitting on my recently purchased, brand new couch at home (it was SGD 250).

twitter icon