KonMari Method for Managing Finances
In January 2019, Netflix released the series to order with Marie Kondo, which has caused a sensation. But what is that movie all about?
What does it have to do with personal finances?
Marie Kondo is a Japanese writer and organizational consultant who developed a method she called “KonMari,” which, among other things, recommends keeping only those items that bring happiness and saying goodbye to the rest.
The author emphasizes that the essence of her system is to understand the sense of value. That is, to define what is most important to you?
With the principle of the KonMari method you can order your clothes, kitchen, books and also your finances. You can save time, save money, free yourself from worries and be happy.
Therefore here are some keys of the KonMari method, linked to personal finances.
1. What is most important to you? What makes you happy?
In order to organize your finances, the most important thing is that you define what is really important to you. Traveling, going to a concert, buying a car, having your own house, starting a business, giving your children a better education, helping your parents, having a good retirement?
Define what your financial goals are. This way, it will be easier for you to make decisions at the time of purchase because you will know that you have goals that you want to achieve.
Remember, when you buy a product or service, ask yourself: Is it useful? Is it necessary? Does it make me happy? If you answer affirmatively, go ahead. If not, think about it a bit and keep your goals in mind when deciding.
Check out: Kakebo – Japanese method to save money
2. Start ordering: gather your financial information in one place
To start the organizational process, Marie Kondo says: “The key is to make the change so suddenly that you experience a total change of attitude. If the process is gradual, the same impact can never be achieved.
For example, Marie Kondo suggests that you gather all your clothes in one place, so that you realize everything you have, and wonder if each thing makes you happier.
In relation to your finances, gather in one place: tickets, bills, your credit card statements, among others.
You can enter all your information in an Excel or in an mobile app, so you will have everything in one place and you will speed up the process.
Keep only the really important documents like tickets to make valid changes or warranties, contracts, among others. The bills that are for food or expenses can be throw away.
3. Organize your finances into categories
The KonMari method refers to the fact that it is better to organize by categories than just to organize a space. Many times, things are scattered and therefore cannot be found.
Organize your expenses in categories, that is, your expenses in food, restaurants, pantry will go to the “food” category. Or expenses such as rent, water, gas, electricity, internet, will go in the “home” category.
Having all your expenses organized in one place will help you realize how much you have spent and what you can save.
If you like to travel, but you don’t have money, identify if you are spending a lot on clothes or restaurant food that you can perhaps consume less often so as not to sacrifice your other dreams.
4. Being organized equals more money
Being disorganized makes you lose money. How many times has it happened to you that you don’t find some object before leaving home, it gets late and you have to spend on taxi. If you don’t have your bills in order, if you miss the payment date you have to pay surcharges. This way we can find thousands of cases.
The KonMari method allows you to have everything in order to invest much less time in finding a certain object or document and avoid losing money.
But if you see beyond that, being organized in your work, in your daily life, will allow you to satisfactorily fulfill your wishes and make your dreams come true.
5. Donate unused items or sell
One of the things that can make the biggest impression when you start ordering is the amount of accumulated unused items. If they are in good condition and could be useful to other people.
On the one hand, you can donate what you don’t use to NGOs, charities or take it directly to the people who need it. However, if you want to make some money, it is recommended you to make a sale, either in your house or in some market, to sell something. You’ll surely get some extra money.
In conclusion, sort everything by category so you can quickly find what you are looking for and keep what makes you happy. This doesn’t mean you have to get rid of everything, but it does mean you have to start giving priority to the things you want.
This article has been written by Chandra Mehta.
Chandra is a seasoned banker with 35+ years of experience in banking and financial services industry. He’s a retired banker and has served as Chief Manager and Assistant Vice President in State Bank of India/or its subsidiaries. He has authored many articles on this site (allonmoney.com).