That's Marie Kondo's catchphrase, as well as the title of her follow-up book to her original bestseller The Life-Changing Magic of Tidying Up.
Lost? Do a quick google search for Marie Kondo, and you'll find a plethora of articles, videos, and guides for the global phenomenon that is the KonMari Method of simplifying your life. Her process involves going through each possession one by one and expressing gratitude for each item, and despite how daunting that sounds, she has garnered a cult following.
"Does this spark joy?" is the question at the core of Kondo's process, and it's also a very tough question for anyone who wants to take a closer look at their finances: How do you simplify your financial life when many aspects – mortgage payments, credit card debt, market fluctuations – do not spark joy at all?
But we're getting ahead of ourselves. If you're going to follow the KonMari Method, the first step is to imagine what your ideal lifestyle looks like. What are your goals? What do you love about your life now, and what would you change?
Once you have your ideal lifestyle in mind, then you can start asking yourself "Does this spark joy?" However, in the case of finances, we suggest you try this question instead: "Will this help me attain my ideal lifestyle?"
Now that we're ready to start tidying, let's take another page from the KonMari Method, and place every piece of your finances out in the open: that is, gather every aspect of your finances in one place (be it a spreadsheet, an app, or printed pieces of paper on a table) so you can see everything at once. You may already be aware of our online wealth management software you can access through our website, where you can see your FPS investment accounts updated daily, link your bank accounts, credit cards, and other financial accounts, and securely store important documents in the Vault. If you would like more information on how to use FPSLive, check out our guide or give our office a call. See how else we can help with this step in the process on our Getting Started page.
Now that you can see everything all in one place, it's easier to see what is and isn't helping you attain your goals. This is a personal process that is different for every individual. "Fewer items does not make everyone happier; it's about finding the balance of items that makes you feel the most comfortable – and the same thing applies to your wealth," Kondo told NBC in an interview. 1 We would never prescribe the same actions for everyone – we believe in advising clients based on their own goals and unique situations.
Also important is keeping the philosophy in mind as you spend money. Kondo stated "I do believe it is important to use this self-awareness to guide your spending habits and let go of any tendencies or habits that are hindering you from meeting your financial goals (and your ideal lifestyle, overall)." 1 Intentionality in spending and in saving is essential if you are serious about achieving your goals.
While we're on the subject, another area to tidy and organize is your financial documentation:
Keep the original documents of the essentials, including marriage certificates, estate planning documents, and personal ID cards.
Digitize and back up important records such as receipts for large purchases and account statements.
Shred what is not needed. 2
Here's the FTC guide3 to reference when you aren't sure what to keep and what to shred.
Many of our clients already know the benefits of planning and saving for their ideal lifestyle. If you would like to get started determining and achieving your financial goals, please call the Financial Plans & Strategies team at 317-882-7675.