Those who like to combine minimalism and savings are thinking about how to create a minimalism budget. In this article, LMinimalism budget in 7 steps. I will give some tips to help the reader budget 😊.
Recommended products
Why create a minimalist budget?
It is easy to get into debt and mismanage spending, which makes it difficult to make ends meet.
In reality, the goal of creating a minimalist budget is to control your budget and save as much as possible by spending only on the essentials.
No surprise. The more you save, the more money you will have for your projects😉.
Nowadays, you can create a budget using Excel or an app. Note that some bank accounts also help track expenses.
Now, we will analyze how to create a minimalist budget in 7 steps 😊
The minimalism budget in 7 steps
1 – Budget management
First, to track a budget, you need a document or application that tracks and categorizes your expenses. For example:
- Excel file
- Budget management app
- Some bank accounts
👉 The goal is to visualize how much you spend 😉
I created a document to establish a budget. You can Download my PDF on budget organization. This will give you a simple overview of your budget.
Then, feel free to modify it according to your preferences and expenses.
If you want more information on this list, you can read my article here. It is also in the form of an excel table.
In truth, the method for tracking the budget doesn't really matter. The important thing is to have a visual way to control spending 😉
⚠️ I would like to point out that this step is essential for the future ⚠
2 – Record and analyze all expenses
Once you have a spending chart, according to your chosen method. You will need to note down all your expenses and savings according to your monthly or annual budget.
In this case, The spending budget must be divided into at least 3 categories:
- Invoices
- Leisure
- Investment and savings
For a beginner in personal finance, I suggest starting by dividing expenses according to Warren's theory1.
- 50% invoices
- 30% leisure
- 20% investment and savings
3 – Reduce secondary and luxury expenses
In my spending table, I noted a section concerning secondary and luxury expenses.
Note that this part corresponds to leisure in Warren's theory.
According to Warren's theory, the amount should not exceed 30 %.
However, in my opinion, to have a minimalist budget, you need to find ways to reduce these expenses by at least 20 %.
There are several possibilities to reduce these expenses. For example:
- Choosing a cheaper vacation
- Do not consume items that will be useless a few weeks after purchase.
- Stop unnecessary daily consumption, such as drinking soda while waiting for the train
- Switch banks for an account with no maintenance fees and low banking charges
We must not hesitate to reduce these expenses as much as possible. That's why I call them "”secondary and luxury expenses”.
4 – Set a reasonable limit per spending category
The closer a spending category is to 0 CHF spent, the closer you are to a perfect minimalist budget!
However, this needs to be qualified.
I'm not saying every expense has to be zero! After years of minimalism, I also have a few unnecessary expenses 😎. There's no shame in that! But it's a learning process that takes time to complete.
What's the maximum percentage I should spend per spending category? 🤔 📝
Everyone has different needs. That's why a financial budget is called a "”personal finance budget”.
In my case, here is a table that indicates the maximum to spend per spending category 🧐.
| Expense | Percentage that I limit myself to spending (in relation to my income) |
|---|---|
| housing | 20% |
| Transportation (vehicle) | 7% |
| Insurances (not including basic health insurance) | 2% |
| Subscriptions | 1% |
| Holidays & travel budget | 5% |
| Leisure / Entertainment | 15% |
These limits may not meet your expectations, but to establish an effective minimalist budget, every expense must be minimized as much as possible.
5 – Do not add any new expenses ❌
Over time, you'll get better at managing your personal budget and saving money. A key point for maintaining a minimalist budget is to avoid adding new expenses.
In truth, why reduce expenses if the money saved is used to create other unnecessary ones?
This is undoubtedly a step backwards regarding a minimalist budget.
Therefore, if you manage to save money, all you have to do is… not spend your savings.
6 – Put part of your savings in a reserve savings account
If you have managed to reduce your obligatory, secondary and luxury expenses, you will certainly have more money left than usual.
That's great! 👍 Creating a minimalist budget is often the goal.
In my opinion, in the reserve account, you put money to better manage occasional financial unforeseen events!
👉 JI advise you to save every month until you reach 4 times your monthly expenses in your savings account.
The goal of this savings is to avoid worrying about unexpected expenses, such as a doctor's or dentist's emergency, or a temporary job loss.
7 – Invest your money
⚠️ Investing involves risk of loss of money. This article is not investment advice. !
Once you have mastered your minimalist budget and you have managed to fill your savings account with the amount of your choice. We move on to investing 💲💲
With good investments, you'll make money on what you've already invested. This reduces your dependence on money from your boss or clients.
👉 Therefore, once a minimalist budget is stable. You should not hesitate to add in one (or more) investments of your choice, the maximum that you consider possible each month. 😉
For example, if you can save 500 CHF per month, set up a standing order from the first day after receiving your salary to invest that amount.
Which investment to choose for a first investment? 🤔
In my opinion (not investment advice), I suggest:
- Account 3a Global 100 with Viac or Finpension. If you reside in Switzerland
- ETF VWRL (global), if you reside outside Switzerland or the USA
- S&P 500 ETF, for example VOO ETF, if you reside in the USA
These are very simple and minimalist investments, with an annualized return of approximately 6-10% over 10 years.
For more information, read my page”investment”.
Note ❗ Any investment may cause a loss of money. I am not responsible for other people's investments ❕
Conclusion
You have read all 7 steps to create a minimalist budget.😉
Once you have filled out your spending chart, you will more easily become a financial minimalist.
You will need to compare, try new financial techniques, reduce expenses, balance your accounts and explore new ways to save money to stay within your minimalist budget and improve your finances.
But I'm sure you can do it!
🔺 As a reminder, here are the 7 steps to mastering a minimalist budget:
- Create a document or choose a budget management app related to personal finances.
- Record and analyze all expenses. For beginners, start with the 50/30/20 rule.
- Define a reasonable spending limit for each spending category (e.g., housing, transport, entertainment).
- Regarding all expenses, get them as close to 0 as possible. By eliminating all unnecessary expenses.
- Don't invent new expenses. It's a risk when saving.
- Add money aside in a savings account. In order to have a reserve of money for financial contingencies and to anticipate variable expenses.
- Once the first 6 steps have been completed. Invest the maximum in a profitable investment with a monthly transfer. To start, do not hesitate to invest in a 3a account for example.
And you, what do you think of this article? The minimalism budget in 7 steps.
The minimalism budget in 7 steps
FAQ – The minimalist budget in 7 steps
| ❓ Question | ✅ Answer |
|---|---|
| What is a minimalist budget? | A method for reducing unnecessary expenses and focusing on the essentials (needs, savings, investments). Objective: to save more and live without financial stress. |
| Why create a minimalist budget? | Avoid debt, take control of your finances, save for projects, reduce money-related stress. |
| Is a minimalist budget suitable for everyone? | Yes, but adaptable: beginners (50/30/20), minimalists (45/15/40), high income + FIRE objective (30/15/55). |
| How to create a minimalist budget in 7 steps? | 1. Choose a tool (Excel, app). 2. Record and analyze your expenses. 3. Reduce non-essential expenses. 4. Set limits for each category. 5. Avoid adding new expenses. 6. Build up a savings reserve. 7. Invest the surplus. |
| What tool should I use to track my budget? | Excel/Google Sheets (free), YNAB (paid), MoneyMoney (Switzerland), bank accounts (Zak, Neon). |
| How to record and analyze your expenses? | Classify each expense into 3 categories: essential (50%), pleasures (30%), savings/investments (20%). Use colors to visualize overspending. |
| How to reduce your secondary expenses? | Travel off-season, cancel unnecessary subscriptions, buy in bulk, limit restaurant visits, switch to a no-fee bank. |
| What limits should be set for each spending category? | Example: Housing (20%), Transportation (7%), Insurance (2%), Leisure (15%), Savings and investments (40%). Adapt to your lifestyle. |
| Why not add new expenses? | The goal is to simplify your financial life. Transfer the money saved into savings or investments. |
| How much should I save in my reserve account? | 3 to 6 months of essential expenses (e.g., CHF 6,000–12,000 for CHF 2,000/month). Deposit into a savings account (e.g., Zak, Neon). |
| When should I start investing? | As soon as your reserve account is full and your budget is stable. |
| Which investment should I choose to start with? | Switzerland: 3a Global 100 (Viac/Finpension). Europe: ETF VWRL (world). USA: VOO (S&P 500). |
| How much should I invest each month? | 20–50% depending on your income and mandatory expenses (e.g., save 900 CHF if your income is 4,500 CHF). |
| What if I keep going over my budget? | Identify the cause (essential expenses or pleasures), use the envelope method, automate saving. |
| How to stay motivated on a minimalist budget? | Visualize your goals, celebrate small victories, join a community (e.g., Facebook groups “Minimalism Switzerland”). |
| Is a minimalist budget compatible with a social life? | Yes! Prioritize free activities (hiking, picnics), organize shared meals, and offer handmade gifts. |
Subscribe for the latest news ✍
You have a frugalist or minimalist project and you want a training? Click ”here”.
My pages
- About me
- Saving / Frugalism
- Blog
- Shop
- Contact
- Training and E-book
- Invest
- Minimalism
- My account
- Newsletter
- Basket
- Order confirmation
Lastest Post
- The 5 mistakes to avoid when starting out in the stock market
- How to invest in the stock market? The complete 7-step guide for beginners
- How does Inflation affect your wealth?
- How many years to achieve financial freedom?
- The 4% rule: The golden rule for financial independence
How does this blog live?
Overall, this blog lives on sharing a frugal and minimalist lifestyle.
For a question of transparency towards the readers. All recommended products are in order to make life cheaper, simpler and to promote the essentials.
Basically, my only income with this blog comes:
- Trainings that I realize
- Promo codes for the products I use
- Donations that readers make in exchange for neutral information.
About me
I decided to create this blog to develop and help readers who are looking for a simpler and more economical life.
Compared to before, I was a person who consumed a lot until the day I realized that my consumption made me sadder and poorer 😑
Now I prefer the minimum of my needs to be happy and achieve my financial freedom.
Without realizingI started to focus on saving and investing to depend on a boss for as little time as possible and to speed up my personal projects.
As a result, I am getting richer in a way that I never imagined since I have an average salary in Switzerland.
What is the purpose of this blog?
The goal is to share and learn with others who seek freedom and simplicity 😉
Are you rather minimalist or frugal Jonny?
I am as minimalist as I am frugalist. However, there are situations where I lean more towards an art of life.
To conclude, I think the most important thing is to feel comfortable in your lifestyle 😊
Leave a Reply