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Tidy Up Your Finances: 8 Ways to Spark Joy for FIRE

Tidy Up Your Finances: 8 Ways to Spark Joy for FIRE
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For those of you who may or may not have been living under a rock the past couple of years, Marie Kondo is the queen of tidying up. She created the KonMari Method to help families get control of their lives through the power of organization. In my opinion, however, it can be applied to other aspects of your life as well – like to tidy up your finances.

Now, I’m going to let you in on a little secret. I’m very type A and LOVE a clean and organized house. Not to mention my categorized to do lists. I strongly believe that everything has its place. As funny as it may sound, I feel more relaxed when our house is clean, tidy and organized.

Based on that information, you’ll probably guess that I was on the Marie Kondo bandwagon as a super fan right away. You’d be right about that!

I binge watched her Netflix show “Tidying Up with Marie Kondo” in a single weekend. On the way to work before I quit my job, I listened to one of her books on Audible. I love the tips the KonMari method offers and the way it impacts lives is truly magical to me.

I’ve slowly been going through our entire house, as you could say ‘Marie Kondo-ing’ it. It’s driving John crazy but I think he appreciates it when the work is done. There’s an air of freedom and simplicity when you have no clutter. We have a new perspective on how to tidy up our finances as well.

The KonMari Method Rules

Rule 1: Commit yourself to tidying up

You need to be ready to put in the work because it’s a great feat to sort through your possessions and lifestyle. A genuine commitment is needed or you’ll never get started. You’ll end up quitting or ruin your efforts after only a short while.

Therefore, just as you need to find your Why of FIRE, you’ll need to declare your reasonings for getting organized. Join together with those who matter to you to keep each other accountable.

Rule 2: Imagine your ideal lifestyle

If you want a more minimalistic lifestyle where everything has a place, or just want to stop feeling so anxious about your home’s current state – this method may be for you.

You probably imagine what you want your retirement to look like, but what do you want your house to look like? Your home is full of memories and is a roof over your head every single day. This is why Marie Kondo symbolically greets each home when she arrives – to give thanks.

Rule 3: Finish discarding first

It may be tempting to try and organize as you go. However, you’ll want to make sure you discard (or donate) all of the unwanted items first.

If an item sparks joy, it gets properly organized in the home later in the process. If not, it is thanked for it’s service and let go with gratitude.

Without following these steps, it’s likely that your home will become cluttered and chaotic again.

Rule 4: Tidy by category, not by location

The KonMari method encourages that you clean up all at once and by category.

Historically, what I have done is focus on one room at a time and work my way through the house to make it look presentable. But, the KonMari Method’s approach is to have you lay out all of your belongings in one category at the same time. It definitely is a different way of thinking than I’m used to!

On the show, I remember seeing time and time again how it shocked people to see just how many clothes they had. Instead of being scattered around the house, they were in one big pile at once. The purpose here is to show you how much you need to declutter the excess items in your home. To be honest, you’ve probably forgotten about half the items in the pile!

Rule 5: Follow the right order

You begin with clothes, and then move on to books, papers, komono (miscellaneous items), and sentimental items, in that order. The thought here is to sort through the easiest things first and gain momentum as you move on to the items that provide a greater emotional attachment.

Rule 6: Ask yourself if it sparks joy

You will need to consider if each item brings value in your life to make your decisions. It can be difficult to decide what you want to keep and what you want to let go of. That’s why it’s important to capture how the item makes you feel.

I love the mindset behind the KonMari Method’s way of eliminating belongings because it instills gratitude for each individual item’s service to you rather than just tossing it mindlessly. It makes becoming more minimalistic a positive experience.

Unofficial Rule #7: Organize Your Belongings

After completing the discarding process, you’ll start to organize your items and put your house back together again. Marie Kondo recommends that you store your items in boxes of various sizes so that they are easily visible. Additionally, she teaches her clients how to fold clothes in thirds instead of in half, and to store them vertically. Now that’s a different way to spice up your drawers!

Gratitude for Household Items and Finances by KonMari Method

Tidy Up Your Finances Using the KonMari Method

One thing I realized is that the principles of being conscientious, grateful and organized can be applied to more than just tidying up your home. There are many other ways to organize your life and improve the functionality, such as to tidy up your finances.

Incorporating the principles of Marie Kondo can improve your finances as well, which is very fitting for the FIRE movement. It takes a well thought out, clear and concise plan with as few interruptions as possible to achieve such a significant goal.

Applying Marie Kondo’s methods to tidy up your finances will result in a simplified plan that can ultimately help you save money. It will also help you be grateful for what you have and the power that each dollar brings. Reflection on this has made me thankful for even having the ability to pursue financial independence and early retirement as a possibility.

8 Ways to Tidy Up Your Finances that are Bound to Spark Joy for FIRE

1. Spark Joy for FIRE

Get excited about what you want your life to look like! How do you envision your life now and in retirement? It’s going to take some hard work and dedication to get there with some lofty goals. Much like how commitment is needed to completely KonMari your house, growing wealth and improving your financial situation doesn’t happen by itself.

2. Fold Your Short-Term and Long-Term Goals

Separate your goals like how Marie Kondo tells you to separate your categories. Both your short-term and long-term goals will need a defined and actionable plan. However, it may take different steps to reach them. Having both types of goals gives you something to celebrate on your journey to FIRE.

3. Dust Off Your Debt

Your income is your most powerful tool to save for FIRE, and when you’re paying mounds of debt every month it won’t go as far as you’d like. Pay off your debt as soon as possible so you can stop paying others and start paying yourself first.

Need some motivation on your mission of tidying up your finances by paying off debt? We’ve got you covered with a FREE debt payoff colorable thermometer tracker printable!

4. Scrub Up an Emergency Fund

Clean up life’s unexpected turns by keeping money piled away. We recommend a minimum of 3-6 months’ worth of expenses, depending on your situation. Sometimes you’ll feel better with more or less. Personally, we sleep better at night with a larger number and continue to budget more every month.

You can keep your emergency fund in a money market or high-yield savings account. Companies like Ally and CapitalOne 360 are popular options. We keep ours in a money market within our Vanguard taxable brokerage account.

5. Sweep Through Your Budget

Sort through your budget with a fine tooth comb. Say thank you to the things that used to bring you happiness but don’t anymore. They may have served a purpose once but some probably no longer align to your FIRE goals. Not only will you be tidying up your finances, but you’ll be saving money and simplifying your budget!

If you don’t use them, cut back on items like:

  • Cable or streaming subscriptions (Netflix, Hulu, etc.)
  • Music subscriptions (Youtube, Pandora, Spotify, etc.)
  • Gym memberships
  • Amazon Prime
  • Magazine subscriptions
  • Going out to eat

6. Mop the Floor with Your Analytics

Don’t have a tangle of accounts to track your progress. Use one tool that will keep everything neat, organized and updated. We’ve used Personal Capital for years to help us with this.

This is especially important if you don’t monitor your assets regularly!

7. Fold your investment accounts

If you have your savings and investment accounts at multiple banks and brokerage firms, it’s probably difficult to keep track of them all. You’ll have a difficult time reviewing your transaction history and performance.

Consider consolidating your assets to tidy up your finances. You can rollover old 401(k) and 403(b) accounts to an IRA at your existing investment firm. Additionally, you can transfer other account types to the institution you’d like to stick with. It’ll be much simpler dealing with one platform rather than multiple in terms of knowing your options, usability of the investment platform, and being comfortable with the people you speak with.

8. Wipe up your tax refund

Have you historically blown your tax refund on trips and splurges? You can clean up your past behavior and tidy up your finances by putting it towards something that furthers your family’s future instead.

Some ideas for tidying up your finances with your tax refund include: paying off debt, adding to your emergency fund, starting a 529 account, or contributing towards your retirement.

If you’d prefer not to give Uncle Sam a free loan every year, consider changing your withholdings as well. The IRS has a withholding calculator that can help you accurately calculate your tax liability.

Take care of this to do list to tidy up your finances and you’ll be on your way to FIRE in no time!

Here are some things that “spark joy” for us:

And as I discussed before – it really sparks joy for me when the house is clean, tidy, and organized, too! 😉 As long as I can keep Simba from spreading her million toys around the house.

Simba Toy Overload

Have you tried the KonMari Method in your home and finances? What “sparks joy” for you? Let us know in the comments!

Bradley Rice

Monday 26th of August 2019

Great read, it makes perfect sense to apply Kondo's advice around tidying up to your financial life as well. Great to see so may principles scale across other aspects of life. I almost always tackle one room at a time, but I love this idea to tackle a category, I have watched some of Kondo's material but didn't catch that method I guess. I think it's time to give the garage a go this week!

Sam @ How To FIRE

Monday 9th of September 2019

Thanks for reading, Bradley! I've always tackled one room at a time as well, so it's definitely a different though process to try by category. How did working on your garage go?