Financial Minimalism: Find Your North Star
A summer series
Ahoy! Enjoying the summer weather and longer days? Great! That’s my chance to introduce some summer money reads: a new series by The Missing Money Piece on financial minimalism. Because no matter the season, we still like it straight and simple here.
To start on this journey, I want you to imagine you are a financial tabula rasa.
For just a moment—entertain the thought that you don’t know anything about your personal finances, you have no preconceived ideas and strategies, you’re not influenced by media and popularity. You’ve never budgeted or kept track of your expenses. Never made decisions about important life-changing purchases and you’re still too far away from retirement to even think about it.
Why?
Because it’s easier to simplify if you build up your values and strategies from nothing. It’s much more difficult to change when you’re already set in your ways. Similar to decluttering your closet, it’s doable and enjoyable to start a capsule wardrobe from scratch, rather than figuring out what to keep from an overflowing pool of clothing.
Now that you’re empty: let’s find your financial North Star.
That’s the one thing that, if practiced consistently, everything else falls into place as well. Instead of giving you a list of 10 stars principles of financial minimalism, I decided to skip the clutter and start with one.
However, since we’re all different and we should all tap into our diversity, I will give you options you can choose from. Just choose one thing to focus on when it comes to your finances—the rest is details. These are all things you can start applying today, no unachievable dreams like ‘cut housing costs’. I want you to feel empowered, not to list fantasy concepts. Here’s how.
🧭 North Star #1: Spend Less Money Than You Make
How it works:
On principle, if you consistently spend less than you make, you’ll always have cash hanging around. Over a longer time frame, you’ll be able to save for bigger goals such as a down payment on a home.
If you keep a consistent lifestyle and live below your means while your income goes up every year, you’ll be able to accelerate and reach those goals sooner. Most importantly: you never need to worry about making a specific payment because you always have extra money.
In practice? The easiest way to follow this North Star is to automatically transfer money into a savings account every time you get paid. How much depends on your lifestyle and preferences, but even $10 put aside and not spent in a month means living below your means. Everybody starts somewhere.
This is for you if:
You often hear yourself saying: ‘I know I spend too much 🙄’
You keep spending more than you earn in a given month.
You use credit cards as a safety net to cover for expenses that don’t fit your income.
You have a budget, but you don’t stick to it. Your app or spreadsheet keeps showing you red colored numbers that you promptly ignore.
This is difficult when:
Your income is already very low and you need to use savings and other emergency ways to cover your monthly spending. You need to focus on making more money as a North Star—otherwise you’ll soon burn out financially.
You have variable income. The math won’t math every month. So you need to focus on stabilizing your feast and famine periods first, and make sure you always have enough money in your account to cover your bare bones expenses.
🧭 North Star #2: Track Your Spending
How it works:
If you commit to put everything on paper, sooner or later you’ll catch on and become aware of your problem spending areas. If you keep adding amounts for yet another fast-food run to your budget, you might start feeling guilty for your bad habit and stop it. Or at least figure out where your money actually goes.
For the more data inclined people (i.e. if you’re someone who’s had success making decisions based on aggregated past information), your spending tracker can be a treasure trove of data points to analyze and visualize. You don’t have to take action right away, just keep tracking everything religiously and you’ll see your behavior slowly change.
In practice? Get yourself a spreadsheet, app or pen and paper and start recording everything you spend. At a minimum, you should categorize your expenses by broad areas of interest, although you can get as intense or nerdy as you want 🤑
This is for you if:
You often hear yourself saying: ‘I don’t know where my money goes’
You feel like you make enough money, but it disappears by the end of the month.
You’re sometimes surprised by your account balance and miss payments even if you can afford them.
You don’t have a clear picture of what you need to pay for each month.
This is difficult when:
You don’t want to be bothered with details and spreadsheets or you’re too busy and distracted to keep track. You’d prefer a more hands-off automated approach to personal finance.
You already know where your money goes and you know that’s not the problem. In other words, you already know how much those fast-food runs cost you… but that doesn’t help. You don’t need more awareness, instead you need discipline.
🧭 North Star #3: Prioritize Time and Energy over Money
How it works:
Learn to make value based financial decisions. First, figure out what matters and what doesn’t matter to you: spending time with your family, getting better sleep at night, getting a job done around the house with minimum hassle, comfort and coziness and so on. Based on this you should be able to ask yourself:
‘Do I want to spend money on this in order to get more of xyz value that matters to me?’
Learn to recognize when it’s worth spending money to reduce friction, stress, or time drains and when it’s smarter to DIY or go frugal. This should help you easily make decisions on:
Ordering food out
Booking a vacation with your extended family
Buying a new mattress
Spending time fixing your shower
Keeping your air conditioning on in the summer
🌼 Most importantly: this is more about life, than about money. At the end of the day, money should help you pay for a good life, not be a preoccupation in itself.
This is for you if:
You waste time doing everything yourself, often inefficiently, or chasing bargains with the cost of time or driving somewhere out of the way.
You hoard money but don’t feel better about your financial life.
You avoid spending out of guilt, even when it would improve your life.
This is difficult when:
You already have a convenience problem. If your lifestyle already includes a lot of ordering food at home, Ubers and impulse buys, your idea about what’s valuable might be skewed. As I’ve written about before, I have no problem with hyper-optimization and hyper-convenience if you can afford it; but if this is a problem for you, then comfort is probably not the value to spend money on.
You tend to confuse valuable with pleasant. Not everything that feels good is an ‘investment in your mental health’. Often, the best returns come from simple, free habits—sleep, walks, connection—rather than impulsive expenditures. You might spend money to prioritize the wrong thing.
What is your Financial North Star? Did you make a pick? Or perhaps you found another star 🌟 more to your preference and liking. Let me know in the comments!
Finally: the summer is just starting! Subscribe for more on financial minimalism every other Sunday!
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Money mindset tips. Those soft gummies and hard pills.
Personal stories of personal development. Watch me grow up.
Step-by-step budgeting articles — these go with The Solo Budget (get on Gumroad or Ko-fi), the budgeting system I’ve been using successfully for 10+ years. Now available in cute spreadsheet form to other humans.
Quite honestly — the same universal personal development advice you find everywhere, but in my (many times) unfiltered voice.