Where Can You Cut Back?

The latest organizing fad can be found in a book called “The Life Changing Magic of Tidying Up,” by Marie Kondo.  I just started doing the Konmari method of organizing and decluttering my home, and once I’m further into it, I will write a post about it, but today, I was thinking about how the idea could apply to my finances.

The basic principle of Konmari is that if it’s not useful in your daily life and it doesn’t bring you joy, get rid of it.  A lot of people only focus on the joy part, but you can’t forget the useful part.  My choir dress doesn’t particularly give me joy, but it’s essentially a uniform, so I can’t just get rid of it.

I’ve just started with clothing, as the plan requires.  And the first thing you do is get all of your clothing out of its storage location and put it in one place.  Everything.  Don’t just flip through your clothes in the closet or glance in a drawer.  Take everything out.  Look at it.  Touch it.  And make a decision.

But how can this apply to our finances?

I’m guilty of looking at my budget as a whole.  I skim down the list.  What I should do is pull everything together at once, outside of my budget categories on my computer.  I can’t lay hands on it, but what I can do is write everything down, by hand.  What am I spending money on monthly?  Most notably, what regular expenses do I have every month/year?  What subscriptions and monthly fees am I paying?  When taken separately, they might seem worth it.  “Oh yes, I get $10 worth of enjoyment out of this monthly service.”  But when I look at the numbers as a whole – are they worth it?  Do I truly get joy out of where my money is going?

Of course, there are some things you just have to deal with.  I don’t necessarily get joy out of my property tax bill (though I suppose I do get joy out of the services that money ultimately funds).   It is definitely a different spin to put on budgeting, and I’m looking forward to putting it into play.

Oh, and wait til I tell you about Marie Kondo’s thoughts on paper.  I cannot wait to start decluttering my file cabinets.  This stuff gets out of control so fast.

Megan Smith

Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.