Editor’s Note: This is a guest post from Emily Guy Birken.
Getting your home to look like your minimalist vision of a cozy retreat is a simple (but not easy) process that anyone can understand. Decluttering your home is about identifying what physical objects are unnecessary. It may be tough to make decisions about each item, but you usually know what you need to do.
But when it comes to making your money life resemble your stress-free financial vision, the process to get there is harder to understand, much less follow. When it comes to physical decluttering, you can’t help but notice the unused treadmill in your bedroom if you stub your toe on it twice a day. Cluttered money choices, however, are much less visible.
The good news is the same strategies that can help an overwhelmed newbie minimalist declutter can also help a financially struggling minimalist get a better handle on her money. Many of the same principles apply.
Here are some decluttering strategies that can double as tips for money management:
1. Know what matters to you.
Minimalism is all about removing what is unnecessary so only the essential remains. This is an inherently personal process, because what is essential for your home and happiness is different from that of anyone else. Recognizing exactly what is most valuable to you allows you to create a home that reflects your values.
Similarly, budgeting your money starts with your values. Other than financial necessities, identify the purchases or spending decisions that matter most to you. Choosing to spend on the things you value makes it easier to let go of the things you don’t.
2. Declutter first, organize second.
A common mistake in decluttering is to try organizing your way out of the mess. Starting with organization allows you to avoid the tough decluttering decisions while feeling like you are making progress. But organizing first means you are often trying to find space for things you don’t want to keep—while ignoring the root of the problem at the same time.
A similar mistake with money management is forcing a tracking system onto your spending habits without first examining those habits and purging the ones that aren’t working for you. This has become even more common nowadays with the countless banking apps that will track spending for you.
But trying to track your spending when you spend more than you can afford is just another way of organizing clutter. It doesn’t get to the root of your financial stressors, and it gives you only a false sense of progress. As with physical declutter, it’s better to start by eliminating the purchases you don’t need before getting into the nitty-gritty of organizing your finances.
3. Start with easy-to-declutter items.
You don’t start your minimalism journey by getting rid of your grandmother’s wedding China, even if you don’t use it. Instead, you start with the duplicates you own, the things in storage you will never miss, or the stacks of magazines you haven’t read.
So if you need to cut expenses in your budget, start with the items that are not important to you or that you simply will not miss. That could be anything from your cable subscription to your unused gym membership to the extra data you never use on your cell phone plan.
4. Every item needs a home.
Minimalist homes have a place for everything, anything out of place can easily be returned to their proper homes.
Give every dollar you earn a home by planning where your money will go with every paycheck. Doing this will mean you are prepared for both expected and unexpected expenses. Some of the “homes” you should plan on for your dollars include: an emergency fund, retirement savings, bills, and fun money.
5. Declutter daily.
A little bit of decluttering every day not only helps to maintain your space, but it also saves you time and frustration. For instance, it is easier to recycle your junk mail and file important mail as soon as it comes in the house, than it is to deal with a teetering pile of paper when you realize you can’t find your cousin’s wedding invitation.
Managing your finances should also be a similar daily habit. Make it part of your daily routine to log into your bank account, check your balances, and look over your purchases. This will help you keep track of where your money is and what it is doing, and it will give you a chance to head off potential problems.
6. Remember it’s a journey.
Both minimalism and good financial health require regular maintenance. Neither process is a once-and-done job, as you will always have to maintain your decluttered home and your budget. There will always be items that need to be put away or decluttered from your home, and there will always be money coming into and flowing out of your life.
It’s helpful to think of both processes as being similar to laundry—these jobs are never done. Just as you must sort, wash, dry, fold, and put away your clothes on at least a weekly basis, you need to make decluttering and checking in on your finances a regular habit.
These six strategies are the basis for creating both a serene and decluttered home, and a well-managed and stress-free budget. Committing to these strategies can help you feel more in control of your life and finances and more connected to the things that matter most to you.
Emily Guy Birken is the author of End Financial Stress Now.