Marie Kondo named her methods of tidying as the “Konmari Method”, in which you have to actually see everything you have and to know what really “sparks joy”. Marie Kondo described things that spark joy to be able to give you a lifted spirit - for example, you may have a really good relationship with an insurance agent, or you have an insurance plan that makes you feel safe and secure. Hence, it sparks joy!
So how do we spring clean & organise our finance using the Konmari Method?
To start with the process, you need to take out everything you own in the house (according to category) and put them in one pile. The same concept applies to your finances.
Let’s start by laying out all your spendings on the table - your bills, insurances, credit cards, rent, paid subscription, etc. Empty your wallets and unseal your bill letters here, and we will have a little “Confession of a Shopaholic” moment. In the show, Marie Kondo made her clients arrange all of their belongings upright so that you can see everything you own when you look at your storage shelf. If your things don’t fit into your storage, get a bigger one, or throw away what you don’t need!
Likewise here, imagine your income as a shelf, and make sure all your spendings fit into it. Otherwise, you need to get a bigger paying job...
What to do next?
1. Start paying your bills on timeWe hate paying our bills too, but these are things we gotta to do or we literally cannot survive. We need to kick the habit of procrastinating and ignore the due dates. One of the easiest ways to lose money is to pay extra for the late payment charges.
Now that you've sorted out the bills that you need to pay and the due dates, you can start paying those bills on time. Stop this bad habit by simplifying the bill-paying process, such as turning on auto-payment from your bank account monthly. If you are an extremely forgetful person, set a reminder on your phone using Google Calendar or your desktop calendar. Anything you can do to make it a habit to deal with your bills on time every month.
2. Unsubscribe from the paid subscriptions that you're not utilisingThese are items you are billed for monthly that are not really a necessity, such as your Netflix, Spotify, gym or your premium Malaysiakini subscription. You may have subscribed to these things because you thought they can spark joy, but have you been utilising them fully? How much value have they brought into your life? Think about it: Are you actually attending all your gym appointments? Do you need both Netflix and Astro? Do you really use that much of mobile data, or will your home and office WiFi be enough?
Think also about the possible digital tax coming our way this 2020, perhaps it is now time to look at some free alternatives to these digital platforms. We made a list of those that can substitute our beloved Netflix.
3. Break down your credit card habitsCredit cards are the root of most people’s financial problems and yet we understand that some people really do need one. Some things you can do are:
- Try to lower down your interest rates. Ask your bank company if you’re eligible for this - it usually works if you have been a long time customer, or if your credit score has always been good.
- Apply for balance transfer credit card, which allows you to move all your credit cards debt into one single credit card. You will need a solid plan to have enough money to pay the transferred amount because it's usually on shorter period and hence, lower interest rates. Read here to know more.
- Keep only the credit cards with most perks and benefits/ reward points. Be wise about why you need a credit card for - if you have more than two, justify your need for them.
4. Consider consolidating your loansJust like the balance transfer for credit cards, you can also consolidate all your student loans, house loans, car loans etc, and repay them via a single debt, on a single interest. How does that work? Simply put, you apply for a loan from a bank to pay off all your different debts, and then you, in turn, pay only the bank.
Simple right! You should consider this option especially if you are currently on a tighter budget and need to lower down your monthly loan payment. Find out more on how you can do that here.
5. Declutter Your Membership CardsTake out all the cards in your wallet and lay out your loyalty cards or brand membership cards. Are any of them covered under the same card? For example, you don’t need a Parkson card if you have a Bonuslink card. Or, if you have a B Infinite card, you don’t need a Starbucks card.
Next, discard the ones with the least reward points/perks, or the ones you use least often. For example, pick the best cards out of your favourite bookstores: Borders, MPH Readers Circle, MPH Online, Popular, or Times. If you make sure you visit the same store each time you need a book, you will collect more points on that card.
In comparison, if you have one card for each store just for the convenience of you going to different stores every time you are near one, at the end of the year you will end up with fewer points for each card! You may even lose them come expiry date.
6. Unsubscribe or Delete Premium Apps and Shopping AppsWhile we are at it, you can Marie Kondo your phone apps too. Stop subscribing to premium monthly paid apps that you rarely use (do you really need ALL of the filters in VSCO X?), and also delete the shopping ones that keep asking you to buy things: Shopee, Lazada, Zalora or Sephora, for example. You can go to their website on your laptop when you need to buy something.
On the other hand, having them in your phone will provide the “opportunity” to window shop and last-last you bought yourself a new Lazada vacuum you may not really need. These apps will also keep sending you promo notifications that make you want to buy more, so if you reaaaally need to keep them, at least have the notifications turned off.
“But when I spend money, it sparks joy…”
The main purpose of the Konmari Method is to look around what you have, identify what sparks joy, and find value in them - in this case, your finances. Not only does being organised mean you can break out of the debt cycle and ensure that you don’t live a paycheque to paycheque existence. It'll also give you peace of mind with positive thoughts, as well as feelings about money while maximising it to the fullest.