This summer, Marie Kondo will be returning to our favourite TV streaming service, Netflix. Quipped with even more inspirational stories, Kondo will transform the lives of others as she applies the KonMari method to businesses, relationships and even communities. For the uninitiated, the KonMari method encourages tidying rooms or spaces by category and discarding things that no longer spark joy. The same tidying technique is also applicable to other aspects of our lives too—and in this article, we are looking at personal finance!
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From decluttering your months-old receipts to exchanging your scattered coins to notes, there are plenty of ways to tidy up your wallet. But this article will go beyond offering those advice and offer the other noteworthy tips and tricks to better manage your personal finance with the KonMari philosophy.
Imagine Your Ideal Financial Lifestyle
Whenever Marie Kondo greets her clients, she asks them to envision their ideal lifestyle. The same method can be applied to your managing your finances too! Think of the goals you would want to achieve. It could run the gamut from “I want to own my dream house in 5 years” to “I want to see my investment portfolio grow by 50% by 10 years”. More importantly, make sure your financial lifestyle is laden with goals that are realistic and achievable.
Some suggestions to ponder about:
- I want to $30,000 for a down payment on a new flat.
- I want to increase my investment portfolio by 50% in five years.
- I want to retire by a certain age.
- I want to ensure that my savings can help my children with their education.
Put Out All Your Finances Where You Can See Them
After figuring out the ideal lifestyle, Kondo then asks her clients to display their belongings out in the open. This is to have her clients view their possessions and it would give them an idea of what to what they will be working with. The same theory can be applied to better manage your personal finance.
Make a habit of recording your daily expenses on mobile applications, such as Monny, Wally and YNAB. These applications help segment your expenses into various categories, such as “Transport”, “Food”, “Entertainment”, “Insurance”, and more. By the end of the month, having a holistic view of where you spend your money on can help you better manage your finances.
Be Real: What Really Sparks Joy?
Now that you have everything laid out in front of you. Ask yourself, “Which of these spark joy?” Are you spending too much on bubble tea monthly? Are you splurging on unnecessary GRAB transportation or take outs? Or are you spending too much on a car insurance that you have been sweet talked into getting (which you don’t really need)? If you find yourself agreeing to the aforementioned scenarios, it is time to cut away some of these unnecessary expenditures.
And if you see yourself having too many credit cards, you can also consider terminating some of them. One of the red flags to look out for is when your credit card changes its terms and conditions. Another reason why you could consider cancelling some of your credit cards is to avoid paying unnecessary annual fees.
Set Financial Goals, Make Them Specific
Discarding things away is no easy feat. Kondo wants her clients to still be appreciative of their uses. You should too! Now that you have a holistic view of your finances and an idea of your ideal financial lifestyle, you should want to set additional financial goals to future proof your savings.
Here are some suggestions that you can consider:
- Setting aside x% of your salary as a saving
- Paying off student loan by X years
- Cut spending on Grab transport by limiting funds allocated to $ X
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Buy Only What You Need, Hold Off Buying What You Want
Managing your personal finance also requires a sheer amount of determination. Now that we have established some practical tips on what you can do, the onus is on you to be diligent and save. Occasionally, the urge to spend will surface and it is important to figure out between “what you want” and “what you need”.
Can you make do without bubble tea today? Can you make do with just a meal from a hawker centre instead from a restaurant? Do you really need that new lip gloss?
And in case you find yourself needing to purchase a big-ticket item due to unforeseen circumstances, you can opt to make a purchase with payment services that allow you to pay by instalments! For instance, hoolah’s allows you to split your payment into three equal segments at zero percent interest. This would help you spread the expenditure affordably over the course of a few months and allow you to get the things you need at the same time.
If you have more tips and tricks to share, feel free to reach out to us!
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