Take a look around your home at all of the “things” filling each room. Now ask yourself this question as you survey the crammed closets, cluttered guest bedroom, or overfilled garage: Do all of these things bring you joy?
Answer honestly. If you need a little help getting started with this sort of evaluation, pour yourself a cup of tea and cozy up with an episode of the Netflix series Tidying Up With Marie Kondo.
Kondo, as you may know, is a Japanese organization guru and bestselling author who has risen to practically rock star status based on her expertise with tidying up one’s personal space (she’s even been named one of Time Magazine’s 100 Most Influential People).
Her approach to improving one’s home is known as the KonMari method, and it involves six specific steps: commit yourself to tidying up; imagine your ideal lifestyle; finish discarding first; tidy by category, not location; follow the right order; and ask yourself if each possession sparks joy.
“Beginning with clothes, then moving on to books, papers, komono (miscellaneous items), and, finally, sentimental items. Keep only those things that speak to the heart, and discard items that no longer spark joy. Thank them for their service – then let them go” explains the KonMari website.
The key phrase there is identifying what in your life speaks to your heart. The goal of the entire effort is to simplify your life by being mindful about what you own and, ultimately, becoming happier with your life.
Those in personal finance circles have taken notice of the KonMari method and are abuzz about how the same approach and principles can be applied to managing one’s money in a much more fruitful, streamlined, and fulfilling way. And it makes perfect sense. Because if you can declutter your house, can’t you similarly declutter your spending?
“Marie Kondo helps people decide what it is you value in your life,” explains Scott Henderson, an accredited financial counselor and founder of Simplifinances. “It’s about how you can use money to live a more joyful life and then cut out everything else.”
Want to give your finances the KonMari treatment? Here’s how to get started.
1. Be aware of where your money is going.
Perhaps the first step toward applying KonMari to your finances is to take stock of how your money is currently being spent, in the same way you might look around your house and review what’s already cluttering your space.
“Most of us don’t even know how we spend our money,” says Henderson. “By recognizing where you spend money, then you’re able to decide, ‘Do I value this?’ You may not be spending your money on things you actually value.”
Henderson suggests sitting down and reviewing at least two to three months of your spending in order to get a truly accurate picture of where all of your money goes. One month’s worth of bank statements may not be sufficient for this effort.
2. Now check your values around spending.
Are you spending money on things that truly matter to you? Does the way you spend and save your money align with your personal principles and life goals? What are your values and long-term goals? All of these questions are part of the process.
“Figure out what you want most, not what you want right now,” suggests Matt Dworetsky, president of New Jersey-based Dworetsky Financial. “If you want that international vacation, it won’t be hard to give up your daily coffee from Starbucks. But, if that $5 cup of coffee is really $5 worth of indulgence and enjoyment, you don’t have to give it up – there will just be a trade-off in other areas of your life.”
The key here is to identify your core values, and determine whether the way you spend money is supporting those values. For example, if spending quality time with your family is important to you, investments you make toward that end — like taking a job with more flexible hours or planning a family outing — are likely to bring you more joy than, say, buying a new watch for yourself. Other examples of core values might include treasured experiences with your family members or friends, supporting charities, living in an environmentally friendly manner, retiring early, or seeing the world.
“Life is not just about acquiring stuff, it’s about spending money and time on things that you value,” explained Henderson.
If a greater portion of your spending is shifted toward supporting these values and big picture goals, then ideally your money will bring you more joy. But that doesn’t simply mean donating more of your money to charity. It means being more thoughtful about your day to day spending as well.
Daniella Flores, the creator of iliketodabble.com, a site about creative money tips and side hustles, recently went through this exercise for herself and her wife, writing down everything in their daily financial life that sparks joy and supports their personal passions, while also identifying those things that do not.
“The things that come to mind that spark joy are our investments; our side hustles, like my blog; our savings; the cash-back apps that we use, because that becomes extra money to utilize; our travel credit cards and points to use for free travel,” said Flores. “Things that do not spark joy for us are the remaining student loan debt that I have. I’m only a couple thousand away from paying that back though, so I’m happy to say that will soon spark joy for me. Bills being past due doesn’t spark joy, which is why we have all our bills on auto pay.”
3. Clean up and de-clutter.
A core part of this process involves actually getting rid of those bills, subscriptions, or expenses that don’t bring you joy or support your values. (Think of this as the “Finish Discarding First” portion of the KonMari method.)
In other words, more than simply realizing what makes you happy and what does not, you must take action to adjust your financial picture and spending to align with your new roadmap.
“We can look at subscriptions we don’t use and cancel them,” said Agnes Kowalski, a wealth therapist. “We can look at services we’re paying for that we don’t enjoy. For example, if you resent having to pay so much for cable every month, cancel and just use Netflix.”
You can also stop buying things you can’t afford, adds Flores. The looming bills will just clutter your mind with stress. And while you’re at it, prioritize paying off debt.
“Start with the highest-interest debt first so it doesn’t continue to accumulate, thus cluttering your financial life even more,” says Flores.
Once you’ve got the ball rolling, keep it going, finding even more ways to declutter your finances and to reduce spending in areas that don’t make you happy.
“Don’t waste time on frustrating, expensive services like cell phone provider contracts and outrageous car insurance companies,” continues Flores. “Always research before signing up for anything. For instance, you don’t need to have Verizon or AT&T for good cell service. Try cheaper service providers like Republic Wireless or Mint Mobile. Another example is we switched our car insurance providers as soon as I found out I was paying much more than I should be paying. After we did our research, we saved ourselves $150 a month by switching.”
4. Tidy up by spending category.
In the same way Kondo suggests tidying up your home by category (clothes, books, papers, komono/miscellaneous, and sentimental items) you may also want to view your spending by categories going forward.
Those categories can be up to you, but ideally they’ll align with your values.
“Set up some sort of system that makes it easy to manage your money according to your values,” says Henderson. Track your expenses, and each time you spend money, assign it to a specific category.
While Henderson suggests categories such as housing, transportation, food, and entertainment, your own list could be tailored to include whatever is meaningful to you.
If that sounds a bit like a budget, well, you’re not far off; after all, a budget is simply meant to help you prioritize your spending — to make sure you have enough money for essential needs, but also the “wants” that are most important to you.
5. Access joy.
Ultimately, the goal of taking the KonMari method into the realm of personal finances is to make money more joyful and less stressful, because for so many of us, money is a significant source of stress and worry.
To further emphasize joy around your money, consider naming your bank accounts with descriptions tied to happier or more meaningful goals: “Savings for an awesome pool account or saving for that trip to Greece account,” suggests Kowalski.
But ultimately, sparking joy with your personal finances comes down to a fundamental shift in mindset, which is tied to a change in the way you use money in your life and the power it has in your world.
“Asking how your finances spark joy is all about shifting your mindset from ‘What can I afford?” to ‘What do I value?’” says Ahna Holloran, a personal finance coach for Fika Finance, who works to help people improve their lives and eliminate stress by taking control of their money. “When you do this, it becomes less about having to stick to a rigid budget, depriving yourself and feeling miserable, to being content with what you have the financial decisions you’re making.”
All of a sudden, says Holloran, you’re evaluating your purchase decisions based on what will really bring you joy over the long term, rather than simply living for the short-term rush.