Since its publication in 2010, Marie Kondo’s “The Life-Changing Magic of Tidying Up” has sold over seven million copies. But how did Kondo get everyone so excited about tidying?
Well, the “KonMari Method” of tidying isn’t just about cleaning your house. It’s about cutting down the excess, transforming bad habits, and reconnecting with your intuition.
More than anything, the book helps uncover psychological obstacles so that you can make lasting change. With Kondo’s approach, you can successfully “tidy up” your finances, too, and start creating a budget plan that works.
Whether you want to pay off debt or stop spending money, you can learn a lot from this bestseller. Here are five of the most empowering financial lessons “The Life-Changing Magic of Tidying Up” can teach you.
5 lessons for tidying up your finances and creating a budget
1. Visualize your destination
Before you start taking any action, Kondo says you should pause and visualize your destination. What are you trying to accomplish? How do you see your ideal lifestyle? What are your specific goals?
Perhaps you feel like you waste too much of your paycheck every month on shopping. Maybe you’ve gotten in over your head with student loans or credit card debt. Or perhaps you want to create an emergency fund or save for retirement.
Whatever your reasons for creating a budget, you should take the time to picture your end-game. Visualize yourself as someone satisfied with their financial habits. As Kondo says, you “will come to a simple realization. The whole point is to be happy.” You want to take these steps to become financially healthy and happy, to meet your responsibilities, and to live a better life.
2. Make changes dramatically and all at once
In Marie Kondo’s world, getting organized is a sprint, not a marathon. Rather than doing a little at a time, she advises her readers to lay everything out on the floor and take care of it all in one go. Even if it takes a week straight of discarding, you should keep going until you’ve finished.
This same approach will help you organize your personal finances.
Gather all of your paperwork, account log-ins, and data in one place. Look for forgotten monthly subscriptions, unused credit cards with annual fees, or anything else quietly draining your savings.
If you need to fill out forms to set up a 401k, do it. If you’ve been dragging your feet about student loan consolidation, now’s the time. Anything that’s been sitting on the back burner should get taken care of now. Not tomorrow. Not next week. Now.
Finally checking off those neglected boxes on your to-do list will feel amazing. As you see yourself taking real steps, you’ll feel empowered to keep going until you’ve got everything taken care of.
3. Tackle the emotionally easy stuff first
Kondo knows that getting organized isn’t just a matter of throwing out old clothes and buying storage containers. Rather, there’s a strong emotional component at work. We get attached to our possessions, and we feel a sense of loss when we throw things away.
The same can be said for our financial habits. We grow attached to certain patterns, like shopping or eating out at restaurants. Some steps are too scary to handle, so we get behind on our credit card payments or default on student loans.
Kondo recommends dividing your tasks into categories.
First, you should tackle the emotionally easy stuff. Maybe you need to set up automatic payments for your utilities. Or maybe you and your roommates need a bill-splitting app so you can stop fighting over who owes who for toilet paper this month.
If you take care of the less daunting tasks first, you’ll feel more in control as you work toward bigger issues. “As you gradually work toward the harder categories, you will be honing your decision-making skills,” says Kondo.
4. Only hang onto habits and possessions that spark joy
The driving force behind the KonMari Method is throwing things out. Kondo encourages readers to minimize their life, so that only the possessions that “spark joy” remain. Rather than coming up with reasons for an item to go, she says you should find a reason for it to stay. And that reason should be that it provokes a strong, undeniable spark of joy when you hold it in your hands.
So how can this lesson help you in creating a budget?
Well, perhaps the biggest drain on your finances is spending too much and saving too little. Many of us have spending triggers, where we shop to reduce stress or overspend at restaurants to fulfill a “treat yo-self” mentality.
By using the “spark joy” approach, you can reduce the number of impulse purchases you make. You can minimize your focus on material items, and instead, redirect your habits toward long-term well-being.
Getting out of debt will spark deeper joy than all those shopping sprees at the mall. By cutting down on excess, you can learn to stop spending money and start saving instead.
5. Learn to let go of what no longer serves you
Kondo recognizes that it’s tough to let things go. A lot of our possessions have sentimental value. Letting something go doesn’t threaten your personal attachment, though. You should thank the item for the role it once played in your life and accept that it no longer serves you.
This lesson is similar to the “sunk cost fallacy.” In behavioral economics, this happens when people struggle to leave an investment because of the money and time they’ve already put into it. They think it would be wasteful to back out now.
However, some assets will only continue to depreciate, turning into liabilities. You’ll sink even more costs into them and get no profit in return. This could apply to non-productive assets, too — boats, cars, and even houses — that need constant maintenance. It could also relate to an investment that’s no longer working out.
Just because you’ve put time and money into something doesn’t mean you should keep it around. Know when it would be more financially beneficial to let go and move on.
Creating a budget and gaining confidence through the magic of tidying up
Kondo encourages readers to connect with their intuition and put their affairs in order once and for all. Gather all of the items on your to-do list in one place and take care of them all in one go. Rather than taking baby steps over time, opting for a dramatic reconfiguration now is more beneficial.
In many cases, we fall short of our goals due to inertia or fear of change. Kondo encourages us to take immediate and transformative action. Plus, she helps us identify and overcome the anxieties that hold us back, like loss aversion and an irrational “sunk cost” mentality.
“When you put your house in order, you put your affairs and your past in order, too,” Kondo says. “As a result, you can see quite clearly what you need in life and what you don’t, and what you should and shouldn’t do.”
By channeling the KonMari Method, you can start creating a budget, stop spending money you don’t have, and take care of important business. Through your efforts, you can create strong, organized financial habits that last.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|