Just like everyone else with a Netflix subscription, I’ve been watching Marie Kondo’s show ‘Tidying Up’.
And here’s the thing… a lot of the things that stress us out about having a messy house are the same things that stress us out about our finances.
That feeling of having a stressful environment, the sense that there isn’t an order to how or why we do things can make it feel like we’re just surviving instead of living our lives the way we’d like to.
If that feels remotely familiar, let’s steal a bunch of Marie Kondo’s ideas and see if they can help.
#1:Dump everything out onto the bed
When it comes to sorting clothes, Marie starts by making people dump all the clothes in their house into one big pile. This totally works for money too!
One of the big reasons why it’s hard to get a handle on how much we’re actually spending in our lives is because our spending is so fragmented. There’s a couple of credit cards, a chequing account, and your PayPal account.
The first step is to try and make a big ole heap of all the things that you spend money on.
Remember, we don’t start sorting by making things organized. We start organizing by making a mess and getting a sense of everything that needs to be organized.
For expenses there are a few ways to do this.
- You can grab a pen and paper and brainstorm everything you spend on.
- You can skim (SKIM, NOT SPEND A TON OF TIME WITH) your bank statements and get a bunch of ideas.
- You can use THIS WORKSHEET to give you some ideas of the various things you spend on.
Remember to include everything you spend: monthly expenses, annual expenses (Christmas, summer, etc) and business expenses.
#2:Like things go together
Once you see the whole picture you can start sorting things into piles.
I recommend you think about expenses in the following heaps:
- Fixed Expenses: things that are the same every month (rent, cell phone)
- Other Monthly Spending: things that happen every month but are different (groceries, takeout)
- Annual Expenses: things that happen a few times throughout the year (Christmas, dental, clothing)
- Business: things that are specifically for your business
A quick note on business expenses: for those of you who are one person businesses, many of the things in your personal lives are partially business expenses. Lots of people get really confused when I ask them to separate these ‘business’ costs from their personal life. Remember, this is not a tax exercise, this is an organization exercise. Start with the costs that are clearly business: the training, the commission etc. Then start dealing with the grey areas – your rent which includes a home office. Don’t spit them, just put them in the pile that they are most like. You can always move them later.
#3:Does it bring you joy
The crux of the Marie Kondo philosophy is around picking up an item and asking it … does it bring you joy.
This is a really useful exercise when it comes to your spending. In our weekly email a few weeks ago we talked about Emotional Return on Investment and Emily made a series of worksheets to guide you through the process of figuring out what expenses are adding to your life, and what are things that you really wish you could throw away.
#4:Quantify it: How much do you need
This is the part that’s different.
Once you’ve got everything sorted into piles and filtered through your joy lens… then start looking at the numbers.
How much do you need? What expenses do you know off the top of your head? Which ones are harder?
One of the things I love the most about Marie Kondo’s philisophy is there doesn’t seem to be any shame in the decisions that her clients make. She doesn’t care if you keep all the clothes or all the books… she just wants to make sure that you really want to keep all the clothes and all the books.
That’s what I want for you too. I don’t want you to feel shame around the amount of money you spend on things, but I want you to think deeply about those numbers and make those decisions on purpose… instead of by default.
… and I think that’s what Marie Kondo would want too!
Want to start getting control of your money? How can I help?
Financial Planner/Opera Singer
Money never came naturally to me. In fact... I was a bit of a disaster. I remember (very clearly) what it feels like to be 'financially out of control'.
And honestly, I still get stressed about money... that doesn't stop... the difference is that now I have the tools to deal with that stress.
And those tools are what's made it possible for me to build a life full of the things I want: art, creativity, travel, family and more.