By Julie Ford
This article originally appeared on Credit.com.
I recently read the popular book, The Life-Changing Magic of Tidying Up by Marie Kondo. I couldn’t put it down and have been compulsively “tidying” since we returned home from vacation.
Purging and reorganizing is already a necessity in our apartment (my family of four lives in a modest one-bedroom apartment in New York City), but this book gave me license to toss and give away with greater freedom and no guilt.
As I tidied our home with freedom, I found myself thinking, “This is exactly how I feel about financial planning!” Kondo takes a task-oriented topic like tidying and creates a new and more emotional lens through which you approach the subject – resulting in a thoughtfully ordered home. I aim to do the same for clients through financial planning, which when done properly, is much more of an emotional than administrative process than you might think.
For those of you who have not read the book, here’s a very brief overview: you tidy by category (e.g., clothes, books, toys), not room, and only keep items that “spark joy.” In the end, every belonging has a dedicated place in your home.
So what do tidying and your money have in common?
This idea of keeping only what “sparks joy” is the heart of this tidying approach. The same applies to money. I believe your saving, spending and giving should be on what “sparks joy.” Sure, some things we buy are necessities and don’t feel particularly joyful, like health insurance, but does the effect of that purchase – protecting your health – bring you joy? Absolutely.
What about the things that bring you joy which are out of your budget right now? Identifying what you love and want in your life is a vital part of financial planning. We set goals and learn to be patient and appreciative of what we have today.
A review of your spending and goals might highlight that your spending is not in line with what you truly value. If this is the case, be bold and make changes.
“People cannot change their habits without first changing their way of thinking.”
This is so true when it comes to our money habits and view of wealth. Real and lasting change has to start at the heart level, with a fresh perspective. Our habits won’t change until we stop and think about why we spend and the impact of our spending. Let’s get personal. I review our family’s spending on a monthly basis. We are often over budget on ordering take-out. Why do we order take-out so much? The most common reason: I get busy with our boys and work, and don’t prioritize grocery shopping. How does this impact our family? We have less money for other things that matter a little more, e.g., babysitters and date nights. So I remind myself of what we value more than quick and mindless dinners and put more effort into cooking, which I actually enjoy.
“Tidying is just a tool, not the final destination.”
Just like tidying, financial planning is a means to an end. Its purpose is to help you get where you’re going. What is your purpose? Where do you want to go in life? As a financial planner, I help people learn to spend, save and give with this in mind. Sure, you need to continually review and tweak your goals and plans as life happens, but you re-tidy and move on.
Financial planning – and tidying, as the book claims – equips and empowers you to focus on what really matters in your world. It allows you to move forward with less anxiety and more excitement about the days to come.