I came across Marie Kondo quite accidentally when I was searching online on how to organize my chaotic room. For those that do not know, Marie Kondo has created a niche for herself for being a tidying consultant and author.
She uses the ‘KonMari Method’, to gather all of her belongings, one category at a time, and then keeping only those things that spark joy.
Being a Registered Financial Planner, I knew somehow I can adapt her methodologies when creating a financial plan for my clients.
So, here are the 5 simplified lessons I’ve learned and adapted from the KonMari method to help your financial lives.
Lesson #1: Tackle by Categories
Kondo’s first rule is to tidy by category—for example, deal with every single one of your books at once otherwise they’ll continue to creep from room to room, and you’ll never rein in the clutter.
In terms of financial planning, you will need to review your entire financial plan. Then, take out your existing insurance policies; see whether it suits your needs.
Review your investment portfolio; make sure your stocks or funds are performing and in balance.
It is best to look into an overall picture of your finances dissecting one by one starting from insurance, investment, tax, estate and retirement.
Lesson #2: Respect Your Money
Kondo considered her clothes’ feelings. She asked herself: Are they happy being squashed in a corner shelf or crowded on the hangers?
Now, ask yourself. Is your money happy just getting a mediocre return at fixed deposits?
Make sure your strategy or asset allocation is in accordance with your ability to take a monetary risk. Otherwise, if the market were to go down, your emotions will swing down as well.
Lesson #3: Nostalgia is Not Your Friend
Kondo knows what she’s talking about when she insists you put blinders on and focus only on the category of stuff at hand.
It is important not to be sentimental on a particular fund, strategy, plan or even product. If it does not work, we will let you know and we shall revisit and make changes to it so that it benefits you.
It is also important to develop your own decision instead of following a friend, partner or parent’s pattern of investment style which may not be in line with your own financial goal.
Lesson #4: Financial Planning Can Spark Joy TOO!
Channeling Kondo, chants a little prayer before she started digging through the mountain of clothes.
Financial planning too can be overwhelming at the beginning with so many calculations and questions. But once you kick-start, diagnose, analyze the problem and get prescription with solutions, it will definitely spark joy!
You know you have de-cluttered your finances; you know you have made a difference to yourself, your family or an organization that you love.
Lesson #5: Fall in Love With Your Financial Plan
This is why people become evangelical about the KonMari method.
Once you’ve cleared away the clutter and put things away, your dresses and skirts—the fun stuff, let’s be honest you can see the light of day.
All of which means you get a hit of joy—even hope!—Whether you’re getting ready in the morning to work or for a jog, you will know you have all areas in your life covered.
Your insurance is checked. Nominations are checked. Investments checked. Will and Trust checked.
Even if you have boarded that unfortunate flight, you know your family is taken care of.
Now, It’s Your Time to Spark.
As Marie Kondo said, changing lifestyle habits acquired over many years is often extremely difficult but let’s all agree reaching financial stability in life is not an impossible dream.
Try to follow the 5 methods outlined above and you will not fail in your pursuit of reaching financial stability in life.
Give it a few months and see the results. You will be richer, mentally happier and confident. Happy Planning!
The author, Puruvahinni Supramaniam, is an Advisor at SK iWealth and writes for her personal financial blog, aiskacangforsoul.