A New Way to Think About Money
Marie Kondo's best-selling book about decluttering, The Life-Changing Magic of Tidying Up, has prompted people around the world to shed their stuff. The Japanese organizer's precepts have "developed a cult-like following," according to the Wall Street Journal, and may have prompted an increase in donations to secondhand stores, according to Crain's Chicago Business.
But Kondo's approach, which she's dubbed the KonMari Method, also translates surprisingly well to dealing with your money. If organizing your finances feels overwhelming, try applying the following ideas for gaining control.
Many organization experts suggest decluttering a little at a time to avoid burnout, but Kondo advocates a get-it-done approach using marathon sessions, saying that short tidying bursts don't result in the kinds of sweeping change needed to really keep your place in order. "Rebound occurs because people mistakenly believe they have tidied thoroughly," she writes, "when in fact that have only sorted and stored things halfway."
Consider setting aside a whole day — or a few days — to finally set your finances right and catch up on all the tasks you've been putting off. Ron Lieber, personal finance columnist for the New York Times, scheduled his "tune-up" day for a weekday when customer service departments are all available. (He used an unpaid mandatory furlough day, but you might use a vacation day.)
Tackle Tasks by Category
Traditionally, organizers go room by room. Kondo disparages that approach, since people often store the same type of item in different places and don't really grasp how much of it they have. "When we tidy each place separately," she writes, "we fail to see that we're repeating the same work in many locations and become locked into a vicious circle of tidying."
Taking the same approach to your finances can help you round up and consolidate bank accounts, retirement accounts, credit cards, or other areas where there might be overlap or redundancy. Many people have old 401(k) accounts scattered around at various prior employers, for example. Rolling those accounts into the current 401(k), if the employer allows that, or into a single IRA can reduce fees and make it easier to monitor investments.
Similarly, you might discover you're paying annual fees for credit cards you no longer use, or a little research may show you there's a better card for your needs. If your credit scores are good, you can close an unnecessary account or two without worry. (If you're trying to improve your scores, though, keep the accounts open until you've achieved your goal.)
Start With the Easy Stuff
Kondo recommends a definite sequence of categories: clothes first, then books, papers, miscellany, and finally mementos. Dealing with less emotional stuff first helps give people practice discarding before they have to tackle the harder decisions.
"People who get stuck halfway usually do so because they start with the things that are hardest to make decisions about," Kondo writes. "Things that bring back memories, such as photos, are not the place for beginners to start."
Similarly, going straight for the financial categories where you feel a lot of shame or fear can make you want to avoid your finances entirely. So consider starting with tasks that feel the easiest to you.
Perhaps that's reviewing your bills and calling the cable company to negotiate a better deal. Maybe it's setting up a filing system or shopping for insurance. Only then should you take on the trickier stuff, such as setting up or fine-tuning your budget.
Debt repayment is another category that can be tough but rewarding once you have a solid plan in place. If you're behind on retirement savings, that can trigger fear — but again, you'll feel better once you inch up your contributions or take other steps to get on track.
Save making a will and other estate documents for last, since that can stir up a lot of anxiety and you'll want some successes under your belt to reassure you that you can successfully make decisions.
Do Your Goals "Spark Joy"?
At the center of Kondo's approach is the Japanese word tokimeku, which means “flutter” or “throb.” Kondo advises keeping only the things that make your heart flutter or that speak to your heart. She asks that you pick up each item in your home and ask yourself whether it makes you happy — specifically, if it sparks joy. If it doesn't, out it goes. No more holding on to stuff because it cost a lot or you think it might come in handy someday.
Defining financial goals that spark joy can help you find the motivation to achieve them. If you're paying off debt, for example, visualize how it will feel to have all that extra money — cash that's currently going toward debt payments — freed up for other uses. Imagine the trip you'll take or the delight in seeing your savings account grow. If you want to boost your retirement savings, fantasize about how you will spend each hour of a typical day once you're financially independent. Making your goals more real, and finding the ways they can spark joy in your heart, can help you summon the courage to change your life and achieve them.
A final point: If you're struggling, consider getting help. Professional organizers are available to help people deal with their stuff, and financial planners can help coach you through money issues. You can start with reading about how to find the right financial planner or 10 questions to ask a financial advisor.