Here is how we can all go into 2020 while tidying up our finances like Marie Kondo..

How You Can Tidy Up Your Finances in the New Year

If you’re like me, you watched every episode of “Tidying Up with Marie Kondo” and had a few laughs, a few tears, while marveling at her graceful and positive approach to helping people manage all their stuff.  

But unlike me (unless you’re scarily similar), I took away some amazing lessons that we can absolutely apply to our financial lives whether Marie Kondo was thinking of my bank account or not.

So here is how we can all go into the new year while tidying up our finances.

Take mental inventory: 

Start with the messiest closet of all: our head.
Write down the few phrases that come up repeatedly when you think about money. For a long time one of mine was, “I can’t afford it.” A few other common ones I hear, “I’m bad with money,” “I’ll start doing smart things with my money when I make more,” and “I have no interest in investing” or “it’s too complicated for me.” 

Once you have them on paper, take Marie’s advice, and acknowledge them, thank them for their service, and decide whether you want to carry them into your future. Clean out the negative money cobwebs in your mind and make space for a new money identity. Perhaps, a positive, confident, and an intentional one.

My new money identity: I’m a badass at making money, and I can’t wait to grow my revenue to seven figures so I can invest in more female-founded start-ups. 

Take physical inventory

Again, if you’ve watched this series in full  you know that Marie’s method starts with your clothes. Your first task is to dump EVERY. SINGLE. ARTICLE. off clothing you own onto a bed (or floor if need be). Then she asks you to pick up one article at a time and only keep it if it “brings you joy.” 

In a similar spirit, your next task is to dump all your financial accounts onto one page.
Everything you own goes on the left. This means bank accounts, investment accounts, retirement accounts (yes, you know, that 401(k) from three jobs ago counts), real estate properties, and all their values. 

On the right, list the accounts that you owe on; that is, balances (not monthly bills) that you make installments on like credit cards, car loans, student loans, mortgages, and other loans. This is a great exercise to do with your significant other as most relationships delegate financial decisions to one of the two. (More on managing finances in your partnership in this article.)

What you have just accomplished above is what us finance nerds call a personal balance sheet (I didn’t want to tell you what we were doing beforehand or risk scaring you away). Congrats!  When you subtract what you owe from what you own, you will get your net worth.

Take a Marie moment and honor this number. It is the result of the path that has brought you here, and it is not good or bad. Now you can thank it and track this number to your future money identity.

Why this matters: This is the number that will allow you to decide when work becomes optional. While every situation is unique, the general rule of thumb for being “on track” is that your net worth is three times your income by your 40s, five times income by your 50s, and 10 times your income by your 60s (excluding your home). If you are in your 20s and 30s, your first target is one-times your annual income.

Last step here: Now that you’ve taken physical inventory, you will probably find that there are accounts you aren’t using anymore that can be closed or consolidated (perhaps that old 401k from three jobs ago).  Take the opportunity to simplify here.

Take cash flow inventory

What food and movement are to your physical health, cash flow is to your financial health. The single most important thing you can do is be aware of how much money is coming in every month and how much is going out.  And the app can do this for you.

Once a month, set a date night on your calendar (with number one, i.e., you) to categorize every expense for the previous month. I doubt Marie Kondo would approve, but mine usually involves a glass of bubbly or a craft beer to remind me that it’s not that bad. So you select the drink or slice of chocolate cake that will get you to show up for your date.

As you can tell, like most of us, even I resist the idea. But like a good workout, you always are glad you did it and will feel great afterward.
One mistake most people make here (besides not putting it on the calendar) is that they try to do too many things at once. This date night should only be about categorizing data. This isn’t the time for judgments (nothing is good or bad) or changes (no re-working a budget here). If you are new to this, it’s a lot like moving into a new space and living in it for a little while before making major color or furniture decisions. 

Over time, you will make better choices about spending what “brings you joy” versus spending that happens unconsciously as you begin to pay attention to it regularly.

Pay yourself first

If you’ve hung on this far, I may have elicited the eye roll or the desire to punch me in the face. I know, the pay yourself first, advice has been around a long time yet virtually no one does it.

Here’s the deal: I don’t mean figuratively, I mean literally pay yourself.
If you have direct deposit at work, add another account so that a portion of your paycheck is automatically saved before it hits your checking account (where, like all checking accounts, it will be spent). If you don’t have the option for multiple direct deposits, have all of your paycheck go to a savings account first, and then set up an automatic transfer to your checking for an amount less than your whole paycheck. 

The key is to start small and stick to it.
You will do better if you start at $5/month savings and DON’T TRANSFER IT ever, than trying to start big and violating that account regularly (I see you overachiever, dive in head first, perfectionist, Type A). To achieve ultimate financial fitness is a series of SMALL, SUSTAINABLE HABITS overtime (same reason you don’t train for a marathon by starting with a 26-mile run). You will be more successful this way, trust me. 

Try it out for three to six months and then re-evaluate it again to see if you can increase it by another $5. With an automated system like this, what naturally happens over time, even if you don’t manually increase the amount is that any raises, promotions, and bonuses will automatically be saved instead of spent. Eventually, you will achieve the optimal savings rate of 20 percent of your income (yes, include your 401(k) savings in that 20 percent).

So, there you have it, a Marie Sapel approach (get it? That’s me and Kondo combined) to becoming financial fit for the new year. These four steps will put you on the path to a secure and confident future.


Jenifer, founder of Utor Wealth, is a Chartered Financial Consultant on a mission to changing American’s relationship with money. You can find her practice and podcast here.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 3585 MAPLE STREET SUITE 140, VENTURA, CA 93003, 909-399-1100. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Utor Wealth is not an affiliate or subsidiary of PAS or Guardian. 2019-90632 Exp. 12/21

Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. This material contains the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.

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