Do your finances have you feeling overwhelmed? Maybe some home decluttering tips can help.
Marie Kondo is the author of The Life-Changing Magic of Tidying Up and the focus of the Netflix show Tidying Up With Marie Kondo. Her lessons are designed to change people’s relationships to the items they own in order to declutter their homes.
By decluttering your homes, you declutter your life. People have been applying her way of thinking and decluttering methods to any number of other things such as their tangled relationships and organization at work.
Today let’s look at how to change your relationship to debt and declutter your finances, the Marie Kondo way.
1. Categorize Spending and Debts
Marie Kondo advises decluttering the home by category of items instead of by room, as you are less likely to neglect any items in your cleaning. This is a smart idea for your spending and debt management as well.
Start by creating a monthly budget that lists the costs for all absolute necessities such as food, mortgage/rent, and utilities, and see how much is left over. You can then decide how much you can comfortably contribute to your major debts or put into savings.
Then create another budget for organizing your debts to help pay them down faster.
Ordering your debts from highest to lowest interest and then tackling the highest interest rate debts first is the most efficient way to pay off debt. This is what is known as the Avalanche Method. Keep in mind though that you should still be making minimum payments on all other accounts.
Another method to declutter debts is called the snowball method, where instead of focusing on interest rates you start with the smallest debt and work your way up. This is less efficient than the Avalanche method but will reduce your number of debts faster.
However you choose to do it, organizing your finances will declutter the burden of debt in your mind and provide a concrete plan to pay off debt.
If you find budgeting a chore, try our 6 Creative Ways To Make Budgeting Less Boring.
2. Ask “Does This Item Spark Joy?”
One of the key questions Marie Kondo asks when she’s considering an item to get rid of is “does this item spark joy?”
It is amazing how much stuff we accumulate in our lives, and how much money was spent on that stuff. Chances are you have plenty of things around the home collecting dust that you bought on impulse and barely used.
While Marie Kondo applies this principle to consider throwing away items, you can use her same thought process when considering buying a non-essential item.
You might say: “Well obviously this item will spark joy, that’s why I want to buy it!”
Instead, try: “Will the joy I get from this item outweigh the dread of paying my credit card bills?”
The truth is that the “joy” of impulse purchases is quick to disappear, and you need to buy more and more to recapture that feeling, digging you deeper into debt. When weighing the decision to buy something expensive, you need to decide carefully if there is enough of a need or reason to justify the expense. If you are struggling to justify buying it, you probably shouldn’t.
If you think like Marie Kondo before you ever buy items, you won’t end up in a cluttered home and with cluttered debts.
If you are the type to find it hard to resist impulse purchases, learn about The Brain-Hack That Makes Impulse Buys Hard To Resist.
3. Have Empathy For Your Debt
Before Marie Kondo removes an item from a home, she encourages the homeowner to empathize with that item. Was that shirt happy being crammed into an overstuffed closet? Were your old college notes living their best life tucked away into the corner of the garage? By thinking in these terms, it is then easier to let them go.
This is probably one of the hardest ideas to wrap your head around, but: think kindly of your debt. Debt is undoubtedly a burden, but the fact is that it is already there. Ignoring it won’t make it go away. Instead of letting debt drag you down and spending more on items that don’t spark joy, think of debt as an old friend you are ready to set free.
It may require temporarily living below your means, but focusing on paying off that debt will make you happier in the long run.
4. Purge Your Debt To Declutter Your Life
You are ready to really buckle down and get out of debt, but sometimes we all need a helping hand. The only reason Marie Kondo has a Netflix show is that she is hired by people to help manage their clutter!
If you have read all of the above tips and still feel overwhelmed, consider hiring a credit repair specialist. They have the benefit of expertise in dealing directly with credit card companies and lenders to improve the terms of debts and remove negative marks from your credit report.
RepairCreditQuick partners with some of the top financial management companies in America. Contact us and we can provide you with a free credit consultation and help you declutter your finances and (with kindness) say goodbye to your debt.