3 min read
We all want to be organized, right? And tidying up your finances is a lot like spring cleaning your house – you want to bring order to the chaos and live a better life. If you’ve ever seen the show Tidying Up with Marie Kondo, you know that her popular KonMari Method™ goes one step further – it’s about tidying up with joy in mind. That might seem odd when talking about finances (or cleaning out your closets for that matter!) but if you look at your ideal life, consider your financial spring cleaning as a springboard for getting you there.
Make a clean sweep
Sweep out bad spending habits – you know, the ones that tend to upset your savings goals, debt reduction plans and long-term financial goals. For example, if you know at the end of the tiring workweek you tend to order dinner in because you’re too tired to cook, plan an extra meal that’s one of your favourites the Sunday before, pop it in the freezer and you’ll just need to reheat it on Friday night. If you splurge too much on clothes, sidestep the mall and try a clothes swap with friends. The trick is to identify where you spend too much, realizing that many things we buy are wants and not needs, and sweep those patterns out of your life.
Take a look to see if you too many accounts, or credit cards, that you don’t need. It’s a lot easier to keep track of one credit card instead of five! Consider debt consolidation if you want to pare down number of payments you have. Do you find you pay bills late because you lose track of when they need to be paid? Set up alerts for times of the month you need to make your payments or set up automatic payments.
Budgeting doesn’t need to be difficult (or difficult to stick to) if you have a tidy system. Choose a budget calculator that works for you, pick a time (and location) every week or month that is comfortable and allows you to focus. Keep all your financial records in one place – having separate file folders or electronic folders for each type of debt or financial category will help keep you organized. If you want to raise your credit score, so you can get better rates on credit in the future, make a schedule of how you’ll achieve the 5 steps to improving your credit score, such as limiting credit cards and staying within your limits. Once you have a specific plan, it’s easier to stick to your goals.
You can’t actually throw away your debts, but you can have a plan to toss out a debt-filled lifestyle so that you can build up savings, raise your credit score and meet other financial goals. After examining your income, expenses and debts, determine how much you can put towards eliminating your debts. One tip is to start with the highest interest one first – stick with the debt reduction schedule you’ve created (mark your last payment date on a calendar to motivate you toward your goal).
Spring cleaning requires effort, but the rewards are worth it. While you’re spring cleaning your financial house, take breaks along the way to refresh yourself and revel in each step you’ve taken. Like a tidy clothes closet that is pleasing to look at (and takes less time every day to get ready because everything is organized), a tidy financial house ends up taking less of your time than a messy one. Use that time to, as Marie Kondo advises, imagine your ideal life. What is important to you and what would bring you joy if time and money weren’t an issue? Once you can visualize that, you can take steps to get you close to those goals.