Recently, I’ve gotten a few questions about minimalism and money, so I thought I’d answer these by sharing the story of how minimalism helped me become debt free.
One important thing to note first—this is the story of what worked for me BUT I definitely don’t think it’s a “one size fits all” approach to getting out of debt. Money is personal and I know for a fact that what worked for me, won’t work for everyone.
Still, I think it’s worth sharing and I hope that if you’re struggling with debt, it offers you some new ideas to consider. Keep reading to find out how a minimalist lifestyle helped me become debt free.
A quick disclaimer—I am definitely not a money expert, so please keep this in mind. This post is anecdotal and should be considered general advice only.
MY DEBT STORY
Before I tell you how minimalism helped me get out of debt, I think I should give you some background about how I got into debt in the first place.
First, you should know that I was in debt pretty much my whole life. At age 16, I got my first car loan (technically, it was my mother’s because I was too young but I made all the payments myself) and by the time I was 18, I had various credit cards and student loans.
As a young adult, I believed that you had to be in debt to build consumer credit (I have no idea if this is accurate or not) and as a result, I normalised it. I figured everyone else was in debt too and, in a strange way, having debt made me feel like a “real grown-up”.
Of course, this misplaced pride quickly wore off! By the time I was in my early twenties, I was juggling credit cards to get by and I was always stressed about money.
At the time, I told myself that I needed my credit cards to survive because my life was so hard. I created this false narrative in my head about how tough I had it because my family wasn’t in a position to help me. The last bit was true, I did have to support myself, but I also had a full-time job and I think that if I had made better choices I could have gotten by OK.
The real truth of the situation is that I had become a full-blown shopaholic.
I lived way beyond my means and I shopped compulsively. I spent almost all of my free-time shopping (although fortunately, I was working a lot to support my habit so this helped limit the damage!).
Anyway, during my twenties, I went through quite a few big life changes including a lot of travel, getting married and even moving to Australia. There were a few times I managed to pay most of my debt off, but as soon as I saw those zero balances on my credit card statement, I’d celebrate by shopping more! I was stuck in a never-ending cycle.
FROM BAD TO WORSE
To recap, for all of my twenties, I carried debt. I’m not comfortable sharing how much online (a girl’s got to keep some things private!) but I will say that it was bad but manageable. I was living beyond my means but I could always afford more than the minimum repayments and I never felt like I was out of control.
Of course, I was walking a dangerous line and it was only a matter of time before everything came crashing down.
That crash came with my 30th birthday. It’s a long story but the short version is that I had a change of heart and I decided that I didn’t want to continue living the way I had been. I was tired of living a busy and cluttered life, and of the constant struggle to keep my head above water.
I wanted something different for myself and this decision led to another round of big life changes. In less than a year, I ended up getting rid of most of my belongings (this is when I started exploring minimalism), quitting my job, ending a long term relationship, and moving back to the US for a while.
Side note: There is a LOT more to this story so if you want to hear more, I recommend checking out my free intentional living challenge. In it, I share personal stories about my own intentional living journey, what I learned, and how you can apply these lessons in your own life.
I know I’m going off on a tangent now but stick with me—I promise, it’s all related to my debt story! When I quit my job, I gave up my only source of income … so I started borrowing money to survive. I know it wasn’t the best idea but it was a messy time in my life.
To make things even more complicated, I began a new long-distance relationship. He’s British and was living in London at the time, which meant that if I wanted to follow my heart, I had to go even further into debt.
We spent a lot of money travelling, hopping from country to country because of immigration issues, and this all came with a hefty price tag. (If you’re wondering, it was totally worth it because we’re now happily married with a young daughter but it was definitely a long and difficult road!)
What this all means is that when I finally returned to Australia in 2013, I was in significantly more debt than when I left.
At the same time, my attitude towards debt had also significantly changed. I had been learning more and more about simple and intentional living, and I didn’t want to settle for “what everyone else was doing”. I was making a fresh start: I had a new partner, I was living in a new city, and I wanted a new outlook on life too.
I was no longer comfortable being in debt so I committed to finding a way to pay it off as quickly as possible.
HOW MINIMALISM HELPED ME BECOME DEBT FREE
There are two key ways that minimalism helped me pay off my debt but first I want to tell you one more thing about myself: I am not a frugal person.
Most of the traditional advice I’ve heard about paying off debt includes things like making your own coffee, bringing your own lunch from home, etc. This is definitely good advice … but I knew myself well enough to know that it would be a real struggle for me.
I love going out for coffees, watching movies in the cinema, and for the most part, I’m not a huge fan of cooking. Of course, I knew I’d have to make some sacrifices to get out of debt but I didn’t want to give up on all of life’s little pleasures.
With this in mind, I decided to take a radically different approach—one that was only possible because I was a minimalist. Instead of giving up the small things, I decided to reduce my biggest expenses first.
LIVING SMALL (VERY SMALL)
The moment you’ve been waiting for … 😂
The “secret” that helped me become debt free and then, save for a seven-month honeymoon, was living in a really REALLY small home.
It was a tiny apartment marketed towards students; I don’t know the exact measurements but I think it was about 160 square feet. We had one private room and then we shared our bathroom and kitchen with our neighbours. The unit came fully furnished (it included pots and pans, and even a vacuum cleaner) and also included utilities such as internet, electric, gas, etc.
It was SO cheap (only about 10-15% of our income), which meant we could easily put 50-70% of our income towards paying off debt (and later saving) without sacrificing all the fun.
(And yes—if you’re wondering, my husband did help me pay off my debt, so that was an obvious help.)
A few more things that are worth mentioning:
- The last house I lived in before moving into our tiny flat was a two-bedroom townhouse which I owned and before that a very large three bedroom flat. I was definitely NOT used to living in such a small space.
- Having said that, in the months immediately prior to moving in, we had been travelling in SouthEast Asia on a super tight budget. This meant we spent a lot of time in very basic accommodation (think squat toilets) so our small flat did feel like a luxury in comparison!
- We only had the freedom to even consider moving into a tiny space because I had already decluttered my life. (My husband is a natural minimalist who moved to Australia from the UK with one backpack, so his stuff wasn’t an issue.) At the time, our combined belongings fit easily into my small Toyota hatchback.
- Depending on your background, you may or may not be thinking that living in such a tiny space with shared facilities would be horrible … but the truth is this apartment was actually really nice! It had an inner-city location (we could walk everywhere), high ceilings, wood floors, big windows, and the neighbours were really friendly.
In reflection, I think it’s amazing that we found this place at exactly the right time in our lives. A few years earlier and I know for sure that I wouldn’t have recognised it as an opportunity. Instead, I’m confident that I would have instantly dismissed the idea as ridiculous. I’m so grateful that everything fell into place this way.
THE OTHER (OBVIOUS) WAY MINIMALISM SAVES MONEY
Of course, there’s another obvious way that minimalism helped me get out of debt and save money: I stopped buying so much stuff.
As a former shopaholic, this probably had a bigger impact on my life than your average person. At the height of my shopping addiction, there were times when I spent more on more on clothes and shoes than I did on my mortgage (embarrassing but true!).
Obviously, when I stopped shopping so much, it meant I had a lot more money in the bank and I stopped adding new debt to my credit cards.
THE GIFT OF FREEDOM
In the end, it took us roughly a year to pay off all of my debt and it was completely life-changing.
It’s funny because a few years ago, I wrote a blog post about how minimalism changed my life and I only briefly touched on my debt story. I talk about the gift of freedom—how minimalism empowered me to dream bigger—but I didn’t really talk about money.
This is odd to me now because the truth is that the financial benefits of minimalism can be HUGE. That gift of freedom I wrote about is really financial breathing space.
Yes, it’s nice to have a decluttered home but you know what’s better?
- Having the freedom to work part-time simply because it makes me happy—a choice I made back in 2016
- Being able to travel often (especially important because my daughter’s grandparents live in three different countries and we live in a fourth!)
- Not feeling like I had to go back to my office job after the birth of my daughter
- Being able to grow my blog into a business without pressure for it to be profitable right away (because I actually lost money for most of the first three years)
THE MORAL OF THIS STORY
I think there’s a part of me that has been hesitant to write about money because it’s such a delicate topic. I know that there are a lot of people who are really struggling to get by and they might not have the opportunity to downsize the way we did. I definitely don’t want to minimise their struggles.
Also, I believe that I made some good choices which helped me get out of debt BUT I can’t deny that there was a lot of luck involved too (like finding that apartment in the first place!).
So if you’re reading this, I want you to know that the moral of this story isn’t that you should try and replicate exactly what I did in your life.
Minimalism can help you become debt free but it’s not a one size fit all approach. Instead, I think the real lesson is to keep an open mind about ways you can save money by downsizing your life.
- Could you live without a car?
- Could you move to a different city with a lower cost of living?
- Could you share your home with another family?
I’m not saying that these ideas will definitely work for you but I do encourage you to challenge your initial reaction to these ideas and others. I didn’t think I could live in such a small home but then I did and it was one of the best decisions I ever made. I’m so glad that I didn’t shut the door on that opportunity prematurely.
Also, if you think that downsizing in some way might be an idea that you want to explore, then you’re going to want to begin by decluttering your home. I wrote a free step-by-step guide called Mindful Decluttering to help you (it details the exact process I went through to declutter my home and life). If you’d like a copy you can get one by clicking here or subscribing via the form below.
What do you think? Has minimalism helped you save money or pay off debt? Let me know in the comments, I’d love to hear your story too! x