If you fold your t-shirts so they stand up, and hold something to see if it brings you joy, you know what we are talking about! If not, a quick catch up...
Marie Kondo is a petite Japanese woman who has become a household name for her decluttering and organising. She has sold millions of copies of her four books and now has a Netflix series giving families a home makeover by clearing out the clutter, and choosing joy! If you haven’t already, you really should check Marie out, and you may just find yourself KonMari-ing your whole life!
Which leads to the point of this blog post… It’s a great time to KonMari your finances!!
Step 1: Get it all out
Marie gets people to take all of their clothes out of cupboards, draws etc., and put them in one place so you can look at them. For anyone who has done this, it’s very eye-opening!
You need to do the same thing for your financial situation – get it all out!! Gather all of your financial information and data and put it into a format where you can see it all at once. If you haven’t done something like this before – an Excel spreadsheet works wonders to have all the info easily visible.
Include your bank accounts, investments, credit cards, store cards, personal loans, car loans, insurance policies, superannuation funds etc. Capture your whole current situation in that one place.
And, just remember, the purpose of this isn’t to make you feel terrible about where you are at. Once you can see it all in one spot, you will be able to manage it better.
Step 2: What sparks you joy?
When de-cluttering, Marie gets you to assess what items bring you joy. Do the same with your expenses. Go through the last 3 (or 6) months of your bank statements (bank accounts and credit cards), and for each expense, and ask yourself “does this bring me joy?”
If the expense brings you joy, you will be at ease spending money on that item. You need to make sure there is room in your budget for those items, as they really do make you happy.
If an expense doesn’t bring you joy, yet it really is a necessity, you need to find a way to appreciate the expense so that you can respect it. For example, you may look at your electricity bill, and resent how much it costs. You need to find a way to appreciate the electricity cost – for example it provides the electricity to cook a healthy meal for your family.
There will likely be expenses that aren’t a necessity, and also don’t bring you joy. Get rid of them! Remove the waste and spend more on the things that make you happy.
Of course for those necessities like utilities, it is really important to regularly assess these and make sure you are getting a good deal compared to what is available. You may be very pleasantly surprised about how much one phone call to a utility provider can save you!
Step 3: Set some goals
Now you have a clear picture of where you are at overall by putting all your financial information into one place, and you have determined what expenses spark you joy, you can set some clear goals on what you would actually like to achieve.
Is there more debt than what you are comfortable with? It’s time to put an action plan in place on how to get rid of this.
Is there less savings than you are comfortable with, or are you wanting to plan a holiday, or buy a new car? There are lots of great (and easy) savings strategies available to get cracking on this.
Step 4: Moving on
Taking the time to determine where you are at, and having awareness of what you spend your money on will lead you to making smarter money decisions.
If you would like some assistance in getting ahead, get in contact us with.