"Marie Kondo" your finances

I had an interesting encounter with a Japanese author, Ai Ichii. She writes about organising your finances inspired by the Marie Kondo method. I found her approach fascinating, as I had never considered that our finances could be as disorganised as our laundry piles or wardrobes.

The true goal of tidying is to clear clutter so that we are free to live the life we want. The same principle applies to our finances. If we are clearing clutter from our closets, we should also extend it to our financial lives.

According to the official portal from the Ministry of Communications, financial stress in Malaysia increased by 35% in 2021. Moreover, 65% of Malaysians believe this stress has affected their job performance, and 41% admit it has taken a toll on their mental health.

Improving financial literacy and decluttering your finances can help you feel more in control of your situation. Just like folding a pile of laundry gives you a sense of achievement, organising your finances can bring similar satisfaction.

 

Here are four inspired ways to declutter your finances using the KonMari method:
 

 1. Imagine Your Ideal Financial Life

This step is similar to imagining your ideal living space before tidying up. What are your financial goals? Do you want to be debt-free, save for a home, fund your children’s education, travel, or invest for retirement? By clearly defining your financial goals, you can better understand why you are decluttering and what you aim to achieve.

2. Categorise Your Financial Items

Marie Kondo emphasizes tidying by category, not location. Similarly, start by gathering all your financial documents—statements, receipts, credit card bills—and organize them into the following categories:

  • Income and Expenses
  • Debts
  • Savings and Investments
  • Insurance and Subscriptions

This helps you see the complete picture and identify areas that need attention.

3. Keep Only What Sparks Joy (and Necessity)

Marie Kondo’s famous question, “Does it spark joy?” can be translated into, “Does this financial decision align with my goals and bring value to my life?” This would help us make better decisions with how we spend our money.

  • Subscriptions and Services: Cancel subscriptions and services you no longer use or need. You’ll be surprised that you are paying for something you have not used in months.
  • Spending Habits: Identify and eliminate unnecessary expenses that don’t contribute to your happiness or goals.
  • Debts: Develop a plan to pay off debts that weigh you down and don’t serve your long-term goals.

Focus on keeping financial commitments and expenses that contribute positively to your life and financial well-being.

4. Create a System for Financial Order

Just like organising your physical space, creating a system for managing your finances is crucial:

  • Budgeting: Develop a budget that aligns with your financial goals. Use budgeting tools or apps to track your spending and income.
  • Automatic Savings: Set up automatic transfers to your savings and investment accounts. This ensures you consistently save towards your goals.
  • Regular Reviews: Schedule regular financial reviews to assess your progress and make adjustments as needed.

By establishing and maintaining a system, you can keep your finances organised and under control.

Decluttering your finances using the inspired Marie Kondo method can bring clarity and control to your financial life.

By learning financial planning and literacy, it would empower us as individuals to become more financial savvy and gain better insights into our habits and rebuild our financial stability.

Just as tidying up your living space brings a sense of peace and order, so too can decluttering your finances lead to a more fulfilling and stress-free life.