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Many people struggle to keep up with the demands and expenses of daily life, which can create stress and anxiety. That’s why some choose a minimalist lifestyle: Fewer possessions make for easier management. Minimalists strive to eliminate anything in their life that does not serve their purpose. This leads to more physical, emotional, and financial space.

If the concept of minimalism appeals to you, read on to better understand what a minimalist lifestyle is, its benefits, and how to start on the path to a simpler, more manageable, and possibly more affordable lifestyle.

What Is a Minimalist Lifestyle?

Minimalist living is uncluttered by superfluous items like luxury cars, excessive clothing, and purely decorative furnishings. There can be many reasons someone chooses a minimalist lifestyle; they might want to simplify their life to reduce stress, improve their health, or reduce harm to the environment. They may also want to cut back on expenses and improve their budgeting and finances.

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Surprising Benefits of a Minimalist Lifestyle

When you have less stuff, it follows that you have less to worry about. A minimalist lifestyle allows you to carry less literal and metaphorical baggage around.

Another benefit is that minimalists buy fewer things, which can allow you to save money. From a holistic perspective, minimalism reduces consumerism, and that can benefit the planet.

How to Live a Minimalist Lifestyle

Living a minimalist lifestyle can seem daunting for some, requiring a mindset shift. Here’s a window into a more minimalist mindset and lifestyle to give you a taste of what it involves. And don’t forget as you read that there are benefits to living below your means.

Invest in Experiences

Rather than collecting things and possessions, a minimalist lifestyle emphasizes experiences. Minimalists spend, just in a more deliberate way. For example, minimalists may spend on vacations and concerts rather than on cars and jewelry.

Audit Your Life

Auditing your life involves deciding what is most important and eliminating anything superfluous. Deciding what is most important can be difficult, but some questions to ask yourself are: How am I doing mentally and physically? What’s important to me now that perhaps wasn’t before? The answer to these and similar questions can help you pinpoint your core values and priorities.

A free budget app can help you audit your spending and evaluate how much of it is really necessary.

Eliminate Needless Expenses

A meaningless expense to one person may be valuable to another. That’s why conducting a life audit is important to help you decide which expenses are not serving your purpose. For example, a person might discover that buying gas is often unnecessary if they can manage without a car most of the time. Or that mid-price brands and gently used items can be just as nice as luxury goods.

Set Limits and Delegate

A minimalist lifestyle is easier to control. Setting limits and delegating is one way to live a minimalist lifestyle because you have less to manage. For example, you might use an accountant to do your taxes, or hire someone to manage your website. You might have fewer screens or electronics or downsize to a smaller home.

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Honor Your Priorities

The goal of auditing your life is to establish priorities to eliminate what doesn’t align with them. Part of the journey to minimalism is learning to appreciate what you have and not constantly desire new things. Perhaps you and your partner decide to live on a single income while one of you cares for the family. You may also earn less and have to economize.

Minimalist Lifestyle Tips

How do you implement a minimalist lifestyle? Because the changes can be profound, try making small changes at first as you gradually adjust to a new mindset.

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1. Declutter Your Environment and Your Mind

A great place to start is to declutter your environment. Start with your home, your workspace, your car. Get rid of things you haven’t used in a while or that you are just hanging onto in case you need them. As the space around you becomes less messy, you might find your thinking becomes more clear. You can also make some money by selling your unwanted stuff or donate items.

2. Be a Purposeful Not Prolific Consumer

Minimalists still make purchases, but the emphasis is on quality rather than quantity. An example is choosing to use one credit card that serves many purposes rather than five because each one comes with different rewards. Yes, you may benefit from free miles and cash back, but you will also have to buy more to earn those points and rewards, which is consumerism, the antithesis of financial minimalism.

3. Digitize Movies and Books

Most of us have bookcases full of books that sit and gather dust. It’s fine to keep some treasured items and classic novels, but you can also download e-books or visit your local library. Declutter your home of old DVDs, CDs, and books you don’t need.

4. Recycle and Reuse

Reusing shopping bags, refilling a water bottle instead of buying bottled water, or taking your own cup to Starbucks are ways to cut back on trash and single-use products. You’ll save money and help the environment.

5. Get Organized

As you declutter, you’ll find ways to be more organized. Find a space for things you want to keep, and use storage bins and organizers. When everything has a place, you’ll waste less time trying to locate things, and you’ll be more motivated to put things back when you’ve used them.

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The Takeaway

A minimalist lifestyle is appealing, considering how busy and cluttered daily life can be. You don’t have to embrace full-on minimalism immediately but can take small steps, such as establishing goals and priorities, decluttering your environment, and organizing. You can also reduce your expenses and financial obligations this way. As you progress, you may find that your mind clears, your life slows down, and you are able to budget more appropriately too.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

How do you live a minimalist lifestyle?

Living a minimalist lifestyle requires prioritizing and eliminating things that do not align with your values. The process of elimination will be different for everyone, but it does not have to be quick or painful. Just removing one thing or downloading a budgeting and money tracking app can help you achieve a simple minimalist lifestyle.

What is an example of a minimalist?

An example of a minimalist is someone who lives with very little furniture, or none at all, or someone who moves to a smaller home. A less extreme version of a minimalist might be someone who simplifies things by clearing items from countertops, buys few clothes, or chooses a vegan diet.

What is the 90 rule for minimalism?

The hardest part of achieving a simpler minimalist lifestyle is decluttering. How do you decide what to get rid of? The 90 rule can help. Choose a possession, and ask yourself if you’ve used that item in the past 90 days. If not, then it’s a candidate for elimination from your life because it is not currently serving a useful purpose.

Photo credit: iStock/Pramote Naksomrit

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Each tax season, married couples have a choice to make: Should they choose to file a joint return or file their taxes separately?

The overwhelming majority end up opting for “married filing jointly” status, and often that makes sense. But if you or your spouse are repaying federal student loans on an income-driven repayment plan, you may want to run the numbers to see if filing separately could potentially lower your monthly loan payments.

Read on for a look at the pros and cons of married filing separately with student loan payments and to find out if it could work for you.

Married Filing Taxes Jointly vs. Separately

When you’re married, choosing to file your taxes jointly vs. separately can make a significant difference in the size of your refund or what you owe. Most married couples decide to file a joint return for the tax advantages the IRS offers to those who select this status. But there are times when filing separately may be the better choice for your family’s financial needs.

If you took out federal student loans for help with paying for college tuition, and your student loan repayment plan is determined by the income you report on your tax return each year, for example, you might be able to lower your monthly loan payments by filing separately.

That’s because with an income-driven repayment (IDR) plan like Income-Based Repayment (IBR), Pay As You Earn Repayment (PAYE), or Saving on a Valuable Education (SAVE), your discretionary income is used to calculate your monthly payment amount.

If you file a joint return with your spouse, your payments are based on your joint discretionary income. But if you file separately, your payments will be based only on your individual discretionary income — which could mean a lower student loan payment.

You might have heard recently about the SAVE plan and married filing separately. However, the SAVE plan has been blocked by court actions and is on hold. Borrowers can still apply for the plan if they choose; those who are already on the plan have been placed in forbearance until further notice, with no monthly payments due and no interest accruing.

If you have private student loans, these loans don’t have the same repayment options that federal student loans do. That means your tax filing status won’t impact your monthly private student loan payments.

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Spouses No Longer Need to Cosign IDR Applications

One change that will affect married borrowers is that spousal signatures are no longer required for most IDR applications, whether the couple files their taxes jointly or separately. This includes the SAVE plan for married filing jointly couples. (The only exception is when a couple is paying their student loans together using an Income-Contingent Repayment (ICR) plan.)

In the past, a spouse had to sign to verify that all information on the form, including family size and income, was accurate. Removing the requirement should make it simpler for a married borrower to file his or her application.

Tax Differences Between Filing Separately vs. Jointly

If you and your spouse are thinking about filing your taxes separately in an effort to lower student loan payments on an IDR plan, it’s important to calculate what you could save on your monthly loan bill and then compare that amount to what you might lose in tax benefits for the year.

The tax consequences of filing separately vs. jointly can vary significantly depending on each couple’s unique circumstances, and they can change from year to year. But you could lose quite a few tax advantages by choosing the “married filing separately” designation.

Filing separately can limit the availability of certain tax credits and deductions, such as the American Opportunity Tax Credit (for educational expenses), the Earned Income Tax Credit, the Child Tax Credit, and the Child and Dependent Care Credit. Nor will you be able to claim the student loan interest deduction, which allows you to deduct up to $2,500 in interest paid on your federal and private student loans.

Filing separately may also affect your tax rates and the amount of your standard deduction. And it can restrict a married couple’s ability to offset capital gains with capital losses (a process known as tax-loss harvesting).

Another important factor to consider is that if you choose to file separately, you and your spouse must agree on whether you’ll claim the standard deduction or itemize your deductions. Both spouses must use the same method on their separate returns.

IDR Plans: Low Payments When Filing Separately

Good communication can be key for couples making decisions about how to file, how they will split their finances and manage their deductions if they file separately and other tax questions.

You may want to sit down with a tax professional who can help you run the numbers and assess how all your filing choices could impact your current and future tax bills. And you can use the Loan Simulator on the Federal Student Aid website to get help estimating loan payments based on various IDR plans as well as factors like income, family size, and tax filing status.

When might it make sense to file separately? Let’s say one spouse earns $200,000 a year and has no student loan debt, and the other spouse earns $50,000 a year and has $150,000 in student debt. Instead of using their joint discretionary income when applying for PAYE — which is open only to those on the blocked SAVE plan who want to switch over, as well as new borrowers as of October 1, 2007 who received at least one Direct loan after October 1, 2011 — the couple could file their taxes separately so that the spouse with the lower income and student loan debt could qualify for a lower monthly payment.

As mentioned above, PAYE isn’t the only IDR plan that allows couples to potentially lower their student loan payments by filing their taxes separately. The IBR and SAVE options also allow couples to separate their finances in an effort to minimize their monthly payments and/or reach forgiveness sooner. But each program has different rules regarding monthly payment caps, how long it can take to get student loan forgiveness, and more. So it makes sense to check out the pros and cons of each to find the plan that’s the best fit for your family’s needs.

Other Repayment Options

As you’re doing your research, you may also want to look into other strategies that could help reduce your payments.

One option is a Graduated Repayment Plan, which can keep your payment timeline to 10 years (or up to 30 years if you’ve consolidated your loans). Under this plan, you start out with lower payments and then the payment amount slowly increases over time based on your expected income.

If you owe more than $30,000 in federal student loans, you may be eligible for the Extended Repayment Plan, which extends your loan repayment timeline to 25 years. If you extend your loan term, you’ll end up paying more interest, but your monthly payments will be reduced.

Refinancing your student loans could be another way to get a lower interest rate or longer loan term, or both, which could help lower your monthly payments. When you refinance, you replace your current loans with a new loan from a private lender like a bank, credit union, or online lender. However, if you refinance federal student loans, you’ll lose access to important benefits, like IDR plans, so make sure you won’t need these programs before moving ahead.

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The Takeaway

If you and your spouse are struggling to repay your federal student loans — or if you want to lower your payments to make room for other goals — you may want to look into switching to an income-driven repayment plan. With these plans, couples have the option of choosing the “married filing separately” designation when filing their taxes, which means their student loan payment amount can be based on just the borrowing spouse’s discretionary income instead of the couple’s combined discretionary income.

Couples who file separately may lose several tax breaks, however, which could mean a higher tax bill. So it’s important to calculate what you could save on your monthly student loan bill and then compare that amount to what you might lose in tax benefits for the year.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

Photo credit: iStock/Delmaine Donson

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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