Last week the Wall Street Journal reported thrift shops and donation centers are being overrun by donations from people who have decided to KonMari their homes. For those who haven’t been exposed to the book The Life-Changing Magic of Tidying Up, Marie Kondo is the writer behind the KonMari Method of decluttering and organizing to create more joy in your life. The book, originally published in 2011 in Japanese, has inspired a new Netflix series and wave of lifestyle simplification around the globe.
I read the book a few years ago, and at the time it struck me that clients at TAAG often comment about the relief they feel after ‘tidying’ up their finances. After reading the WSJ article, I pulled the book back off the shelf and saw there are several principals that Marie Kondo and TAAG both follow to help our clients become more successful.
The Power of Tidying
Whether we want to admit it or not, there is something energy-draining about being disorganized. Have you ever spent hours looking for something you need but can’t locate in your desk, garage or closet? It can create enough frustration to affect your attitude the rest of the day. If it happens often enough, it can affect your life more than you realize, causing you to waste time and emotional energy that could be put to better use. When it comes to your finances, disorganization is even more impactful.
When we begin our work with new clients at TAAG, we help them pull together all the various accounts they opened and may have set aside over the years – IRA accounts they no longer contribute to, EE bonds given to them as gifts at graduation, 401(k) plans left behind when they changed jobs, and stock certificates in safe deposit boxes – just to name a few. Getting all these organized and in one place helps remove that floating anxiety that you’ve forgotten something. Addressing whether your current retirement plan is invested optimally or not removes the guilt of ignoring something you know you should look at ‘someday.’ I’ve heard from more than one person that getting all their investments, bank accounts, credit cards and loans on a net worth statement where they can finally see their overall picture is a relief by itself.
Know What Brings You Joy
Whether you’re sorting out clothes or books, the KonMari Method requires you to look at every item you own and determine whether it brings you joy. If not, it should be discarded. It sounds rather extreme, but if we’re honest, many of us have things that take up space in our homes that we don’t really use or enjoy.
At TAAG, one of the first steps we take with new clients is holding a Discovery Meeting to learn who’s important to them, what they value, and what material things and activities bring them joy. We use this information to help build a plan to meet their goals for the future and make spending decisions today. When you can remain focused on what makes you happy and what you want to accomplish, it makes it much easier to skip spending money on something that will eventually end up in the back of your closet.
Doing It All at Once
In her book, Marie Kondo recommends purging by categories, not rooms, because there’s a temptation to simply move everything you’re not sure about out of one room and into another with the idea that you’ll deal with it later. On the other hand, dealing with ALL your clothing at one time, no matter where it is in your house, you can eliminate an entire segment of your clutter and experience a sense of accomplishment that spurs you on to tackle another category.
Tackling each category of your financial plan until you have everything covered makes sense too. We work to get the bulk of a client’s financial picture addressed in the first three months or so of our relationship, when the energy to get things done is still strong. We begin with the issues that are most pressing in your life – Can you afford to move to a larger home? Do you have enough to retire in 5 years? Do I really need to keep this insurance policy that’s coming due again? Once these top-of-mind questions are covered we move on to the less overwhelming financial categories and get them addressed as well.
Nostalgia Is Not Your Friend
This sounds like an odd principal, but it is an important one. In her book, Ms. Kondo recommends that people begin their project with categories that are easier to deal with first, like clothing, rather than mementoes or family pictures that are difficult to part with. It’s difficult to let go of things if we feel we obligated to keep them, even if they are no longer helpful to us or not what we would have chosen on our own.
Over the years I’ve worked with many people who have investments, ways of thinking or habits that they’ve held onto for reasons that might be described as nostalgia. Holding onto stocks that were given to you by a family member can keep you from having a well-diversified portfolio and put you at risk for greater losses. An employer stock purchase plan can be a habit that continues even after it makes no sense to invest more in the same company you rely on for your paycheck. Financial truisms that were passed down to you by well-meaning family members may not be accurate in our rapidly changing world. What worked yesterday might not work today, and we have to be open to letting those things go without feeling guilty.
Your Real Life Begins After Putting Your House in Order
As the book title suggests, Marie Kondo makes a strong argument that tidying up your life acts as a catalyst for greater change, and provides examples of clients who have changed careers, lost weight and found greater confidence in their overall decision-making abilities.
While I can’t promise a transformational shift in your life, getting your financial life in order is a great feeling. We’ve heard it from hundreds of clients over the years, from those who used to avoid looking at their account statements each month and now look forward to seeing where they stand vs. their goal, to people who never thought they could own a vacation home but now look forward to visiting it every month.
There is much truth in Ms. Kondo’s closing directive: ‘Pour your time and passion into what brings you the most joy – your mission in life. I am convinced that putting your house in order will help you find the mission that speaks to your heart. Life truly begins after you have put your house in order.’
What have you got to lose?