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.
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Emily Guy Birken is the author of End Financial Stress Now.
Lori Biesecker says
This article is practically an advertisement (in a very good way!) for You Need a Budget. YNAB literally turned our lives around five years ago. Our single-income household just went through the government furlough without even a hiccup or worry, but before we applied the principles in this article through using YNAB, we would have struggled to feed ourselves. Great advice!
Corrie Jo Hoffmeier says
Lori–Whoot!! Whoot!! for YNAB. Whoot!! Whoot!! for surviving the shut down. In addition to YNAB, I also take out a certain amount of cash each week for groceries/sundries for the family. It eliminated about 1/2 the transactions I had to enter into the app–which makes it far simpler. I just have to enter basic bills and gas. Working our way to a debt-free/clutter-free life . . . which is very freeing indeed. :0)
choose simple says
I never thought that such decluttering principles can act as a guide in how I handle my finances. Thank you for sharing!
Stacy says
Perhaps I misread point number two–but I am in disagreement with that line of thinking. A person must first track their spending to understand where the overspending occurs. Just thinking about spending may not actually indicate where those “indulgences” occur. I would suggest avoiding an app to track spending but instead put in the time to handwrite every expenditure–this makes one aware of where that money flowing and how to create a dam (an action) to stop it. Spending is habitual and understanding the cue that creates a bad spending habit is very important.
Mama Squirrel says
I get this one, though, because years ago I was doing the same thing. I set up a (quite primitive) budget program on my (even more primittive) computer, and I tried to organize all my spending categories. But when I cashed my paycheques, the money went pffft. I hadn’t really changed my spending habits. I agree that doing the tracking might jolt you into cutting out impulse spending, but for me it was a short-lived resolution that fell victim to my small income and large bills.
Robert says
I enjoyed the article as you made some fine points which I’ve practiced for some time. Possibly in a sequel you might consider the physical clutter of finances such as paper/electronic records and how long they should be legally stored. Thank you.
Krystal says
These are great points! I think what really has stuck with me after decluttering my home is that I need to guard what comes into my home. Stuff can trickle in so easily, and I need to address it right away.
MaryVB says
I agree. I often look at my Facebook memories. I am shocked (and saddened) by how often I read past updates on decluttering. I feel like I am in the middle of a huge decluttering project right now. And then I read that I was doing the same thing five, seven, ten years ago.
I need to stop the flow IN. . .instead of working on the flow out.
Varvara says
Thanks for this post! A lot of things to concider.
It`s a bit difficult for me to deal with this topic. I started using CoinKeeper 3 months ago to review my finances without changing my financial behavior first. It demonstrated that I spend too much on eating out and taxis, but too little on things that matter and can help me to improve (health, learning). So I`m trying to redirect the flow, but it seems almost impossible :(
Karen Trefzger says
I’ve had the same feeling, Varvara. I know I spend way too much on eating out, and I make resolutions to change and then don’t keep them. And continuing to overstuff my body with food I don’t need isn’t in line with what I SAY I value (then I do it again, and I think “well, obviously I do value eating too much and eating unhealthfully, since I do it so much.”) My actions speak louder than my words.
So the first step for me is to stop lying to myself, admit that I apparently value bad foods, and find more compelling reasons to change how I eat…reasons that will make me truly desire that change.
Then, I’ve also admitted that I obviously value the convenience of going out to eat, rather than cooking at home. So to change that, I need to change my route home, so I don’t pass by those tempting restaurants. I need to plan meals at home — quick but healthy meals — so eating at home is convenient too. I need to leave all credit cards at home and take out only so much cash for food per week, so that I don’t have the convenience of paying with a card if I’ve used up my cash.
These are my ideas off the top of my head.
This post gave me a lot to think about. Thank you.
Kathryn says
This so speaks to me. I have signed up once again to the decluttering course. Last week sat down with my husband and discussed finances – some of which he didn’t know about. Felt so good to ‘come clean’ about it all. Now begins the clean up journey with our finances. Thanks Joshua.
Mary G. says
And please protect your identify. I am at risk of identify theft, having lost a kindle that was not password protected. I signed up with a monitoring agency and so far so good but you never know.
Grammy says
Excellent points! Thank you! I didn’t think I was an impulsive buyer until I looked at my amazon account. Yikes! So easy to shop & have delivered to my door. But for me, looking at my past purchases, I didn’t NEED them. My goal is to go 3 months without amazon purchases. I’m hoping after 3 mon, I want to go another 3 months. Thanks again!
Michelle says
Grammy,
We suffer from the same affliction. Amazon is definitely a weakness of mine as well.
I love your idea of going three months. I may need to start off lighter an go three weeks. Then another three weeks… Darn Amazon. Makes every day seem like Christmas ?
Rufaro says
Very good read, I wish these things were taught to young children in schools. It would create a less materialistic world.