- Channel Marie Kondo, of Tidying Up with Marie Kondo Netflix series, to find joy in organising your finances.
- Focus on the finances that are important and eliminate financial constraints so you spark joy.
- Learn how to streamline your finances for the future, Marie Kondo style.
At the end of 2018, very few people had heard of Marie Kondo. Now, thanks to her Netflix series, Tidying Up with Marie Kondo, Ms Kondo is a household name all over the world. Her key trademark is finding joy in organising people's homes. And let’s face it, we all need a bit of that.
But finding time to organise anything when life is busy can be hard. And very few people are filled with joy when they’re faced with tackling their finances. The good news is that Marie Kondo has made life easier for us all. By employing a few of her wily decluttering and streamlining tactics, you too could have a financial life to make Ms Kondo proud.
STEP 1: Imagine the financial life you want
Before you make a start on rearranging your finances, it’s important to take stock of your life and think about how you would like to live. Envision your ideal financial situation: how it would feel and what it would look like.
Imagine having all your accounts in order, your loans paid off, a few assets under your belt, while still having the ability to take holidays without breaking the bank. Sounds glorious, doesn’t it?
Marie Kondo suggests writing down your ideal lifestyle or sketching it out to help visualise your goals.
STEP 2: Gather all your financial information in one place
It’s almost impossible to apply any method of decluttering when a lot of the items you need to organise are online or locked away in banks or drawers. To be able to make headway in sorting your finances, you first need to gather all the data you have and make note of it in much the same way Ms Kondo suggests. She asks her clients to pile all their clothes in one place to better see what they have, and organise from there.
Search through your drawers for letters from the bank, raid the filing cabinet and gather your statements to record all the data. Include bank statements, bills, utilities, loans, credit card statements, pensions, insurance policies and mortgages.
Be as thorough as you can, but don’t fret about your financial situation. The process isn’t designed for you to feel shame, it’s about understanding what you have so you can manage things better.
STEP 3: Record your financial data
Marie Kondo says, “Most tidying methods advocate a room-by-room or little-by-little approach, which dooms you to pick away at your piles of stuff forever.”
With this in mind, it appears the best way to organise your finances is to go all in. Get it done quickly and in one go, if possible.
Once you’ve collated all your critical financial information, enter the data onto a spreadsheet or smartphone app. It may be confronting, but it will be worth the effort.
Sirena Bergman, a 28-year-old freelance journalist from the UK, admits to not being the most organised person naturally, but she uses a hardcore spreadsheet system for keeping track of her finances.
“When I moved out of a shared house four years ago and into my own place,” says Sirena, “I realised my outgoings were going to increase massively and I needed a system to keep track of everything.” It was a habit she started as a fiercely independent teenager who didn’t want to rely on her parents for money.
“My spreadsheet isn’t sophisticated, but it works well for me. I have a new sheet for each month and colour-coded columns for income, outgoings and totals. I transfer my spending money for the week to my online bank account and use that for travel, going out and small outlays. All big purchases are itemised on the spreadsheet. I use formulas to automatically calculate my total available income.”
STEP 4: Channel Kondo’s Hikidashi boxes
When tidying drawers, Marie Kondo recommends using Hikidashi boxes to separate out and store the items that spark joy. It sounds like a fantastic idea, but unfortunately we can’t ditch the bills or mortgage because they don’t bring joy to our lives. Being realistic, you can still use Kondo’s method to separate out things you need or don’t need financially.
Look through your last three months’ bills. You may want to download them from your bank and import as a .csv file into Excel. This means you can view all your transactions on one spreadsheet. Once you have them uploaded onto your computer it’s easy to sort through them and categorise. You can organise into virtual Hikidashi boxes.
Split your outgoings into expenses that are unavoidable, like rent, mortgage and utility bills, and put the rest under ‘All other expenses’. It is this box that you need to sort through and decide what brings joy and what you need to get rid of. Is it going to the gym, eating out, going on holiday? The idea is to declutter your finances, so you can’t keep them all.
If it seems too overwhelming, apply the KonMari Method™ to sifting through the accounts. In the home, this means decluttering by category, beginning with clothes, then books, papers and miscellaneous items. The last category is sentimental items. She starts with the easiest things to discard first, and ends with the hardest. To apply her method to personal finances, start with the low hanging fruit first: those things you know you could probably do without.
While it’s not possible to hold these things in your hands to decide whether they spark joy, as Marie Kondo suggests, instead take a while to really think about which ones bring joy and get rid of the rest.
The KonMari Method™ is partly based on the Shinto religion, popular in Kondo’s home country of Japan. They believe you should treasure what you already have and not treat items as disposable objects, by genuinely thanking them for their service to your life before letting them go.
Whatever you eliminate from your finances, say a heartfelt "thank you" and insert it into a ‘box’ on your spreadsheet or app that you can refer to later to cancel in real terms.
STEP 5: Streamline your finances
Once you have gone through all expenses and decluttered, you will then need to streamline your remaining finances into a more workable format that is easy to maintain. To help with this, ask WWMKD (What Would Marie Kondo Do)?
As you would have done when eliminating the finances dragging you down, focus on what to keep and what is important to you.
- Get rid of financial apps you don’t need. Not using it anymore? Say thanks and delete the app off your phone.
- Unsubscribe from emails you don’t need. Don't need 20 email newsletters per day? Say thanks and hit that unsubscribe button.
- Get rid of cards you really don’t need. Pay off the balance in full where you can, say thanks and discard them.
- Close old accounts you’re not using. Move all your money into a single main transaction account. Keep a separate account for emergency funds or put that into your mortgage offset account.
- Consolidate your credit card debts with a balance transfer and roll your credit card debts into one. This means you’ll only have one bill to pay off at the end of the month instead of multiple transactions.
- Arrange to pay off your student loan, if you have one. Set up a payment scheme from your wages so you don’t need to worry about it from month to month.
- Arrange your paperwork into categories. Get one big filing box and label the categories as you have on your spreadsheet so it’s easy to sift through, compare and reject when you need to.
- Go paperless for bills. There’s no excuse for paper billing in this age of technology. Contact your banks and switch to paperless. This can also be done through your online account.
If you’re unsure of how to tackle your finances alone, get in touch with a good financial advisor who should be able to point you in the right direction.
STEP 6: Tips on how to maintain the KonMari-style financial life
Money Coach Sarupa Shah, aka the Soul Agent, uses similar principles to Marie Kondo and encourages physical decluttering as part of getting your finances in order. From cleaning wallets, handbags and purses to areas of the home and office, it all matters.
“You have to create space for what you want physically and energetically and get rid of what you’re holding on to,” says Sarupa. “Like clothes you might slim into one day or the dinner service you were saving for special guests. All of this can keep you feeling very trapped in a low-worth cycle as you’re repeating and affirming you aren’t really worth it otherwise.”
Sarupa encourages her clients to explore the relationship they have with money and how it affects their wellbeing. She works with them to uncover their fears around money and deal with the inner chat that can throw up barriers to financial success.
“There’s a desire to stop fearing money and make it a joyful ally,” says Sarupa. “Changing and transforming your relationship with money completely organises your finances instead of your finances organising you.”
Once you’ve addressed your fears associated with finances, it’s much easier to maintain a good financial lifestyle. And if you’re ever in doubt of how to stay on the straight and narrow financial path, you can always revisit the KonMari principles to living.
- Commit yourself to keeping the cluttered financial life in the past
- Keep reimagining your ideal life
- Track your income and outgoings regularly
- Keep your paperwork in order – file by category
- When you go to buy something new, ask if it sparks joy
- Don’t be afraid to let go of the things you don’t need
These simple rules should put you closer than ever before to your ideal financial lifestyle.