2869: 6 Ways to Apply Decluttering Principles to Your Finances by Emily Guy Birken with Becoming Minimalist

[00:00:00] [SPEAKER_00]: This is Optimal Finance Daily. 6 Ways to Apply Decluttering Principles to Your Finances by

[00:00:08] [SPEAKER_00]: Emily Guy Birken with BecomingMinimalist.com. And I'm your host and personal finance enthusiast,

[00:00:15] [SPEAKER_00]: Dianna Merriam. We're going to get right to today's post and start optimizing your life.

[00:00:25] [SPEAKER_00]: 6 Ways to Apply Decluttering Principles to Your Finances by Emily Guy Birken with

[00:00:31] [SPEAKER_00]: BecomingMinimalist.com. Getting your home to look like your minimalist vision of a cozy retreat is

[00:00:39] [SPEAKER_00]: a simple but not easy process that anyone can understand. Decluttering your home is about

[00:00:47] [SPEAKER_00]: identifying what physical objects are unnecessary. It may be tough to make decisions about each item,

[00:00:54] [SPEAKER_00]: but you usually know what you need to do. When it comes to making your money life resemble

[00:01:00] [SPEAKER_00]: your stress-free financial vision, the process to get there is harder to understand, much less follow.

[00:01:08] [SPEAKER_00]: When it comes to physical decluttering, you can't help but notice the unused treadmill in

[00:01:13] [SPEAKER_00]: your bedroom if you stub your toe on it twice a day. Cluttered money choices, however,

[00:01:19] [SPEAKER_00]: are much less visible. The good news is that the same strategies that can help an overwhelmed

[00:01:26] [SPEAKER_00]: newbie minimalist declutter can also help a financially struggling minimalist get a better

[00:01:33] [SPEAKER_00]: handle on her money. Many of the same principles apply. Here are some decluttering strategies

[00:01:40] [SPEAKER_00]: that can double as tips for money management. 1. Know What Matters to You

[00:01:48] [SPEAKER_00]: Minimalism is all about removing what is unnecessary so only the essential remains.

[00:01:55] [SPEAKER_00]: This is an inherently personal process because what is essential for your home and happiness

[00:02:01] [SPEAKER_00]: is different from that of anyone else. Recognizing exactly what is most valuable to you

[00:02:08] [SPEAKER_00]: allows you to create a home that reflects your values. Similarly, budgeting your money

[00:02:14] [SPEAKER_00]: starts with your values. Other than financial necessities, identify the purchases or spending

[00:02:21] [SPEAKER_00]: decisions that matter most to you. Choosing to spend on the things you value makes it easier

[00:02:27] [SPEAKER_00]: to let go of the things you don't. 2. Declutter First, Organize Second

[00:02:34] [SPEAKER_00]: A common mistake in decluttering is to try organizing your way out of the mess. Starting

[00:02:41] [SPEAKER_00]: with organization allows you to avoid the tough decluttering decisions while feeling

[00:02:46] [SPEAKER_00]: you're making progress. Organizing first means you're often trying to find space for things

[00:02:52] [SPEAKER_00]: you don't want to keep, while ignoring the root of the problem at the same time. A similar

[00:02:59] [SPEAKER_00]: mistake with money management is forcing a tracking system onto your spending habits without

[00:03:04] [SPEAKER_00]: first examining those habits and purging the ones that aren't working for you. This has become

[00:03:10] [SPEAKER_00]: even more common nowadays with the countless banking apps that will track spending for you.

[00:03:16] [SPEAKER_00]: But trying to track your spending when you spend more than you can afford is just another

[00:03:22] [SPEAKER_00]: way of organizing clutter. It doesn't get to the root of your financial stressors,

[00:03:28] [SPEAKER_00]: and it gives you only a false sense of progress. As with physical declutter,

[00:03:33] [SPEAKER_00]: it's better to start by eliminating the purchases you don't need before getting into

[00:03:38] [SPEAKER_00]: the nitty-gritty of organizing your finances. 3. Start with easy to declutter items

[00:03:47] [SPEAKER_00]: You don't start your minimalism journey by getting rid of your grandmother's wedding china,

[00:03:52] [SPEAKER_00]: even if you don't use it. Instead, you start with the duplicates you own,

[00:03:57] [SPEAKER_00]: the things in storage you will never miss, or the stacks of magazines you haven't read.

[00:04:03] [SPEAKER_00]: So if you need to cut expenses in your budget, start with the items that are not important

[00:04:08] [SPEAKER_00]: or that you simply will not miss. That could be anything from your cable subscription to your

[00:04:14] [SPEAKER_00]: unused gym membership to the extra data you never use on your cell phone plan.

[00:04:20] [SPEAKER_00]: 4. Every item needs a home Minimalist homes have a place for everything.

[00:04:27] [SPEAKER_00]: Anything at a place can easily be returned to their proper homes.

[00:04:31] [SPEAKER_00]: Give every dollar you earn a home by planning where your money will go with every paycheck.

[00:04:38] [SPEAKER_00]: Doing this will mean you're prepared for both expected and unexpected expenses. Some of the

[00:04:44] [SPEAKER_00]: homes you should plan on for your dollars include an emergency fund, retirement savings,

[00:04:51] [SPEAKER_00]: bills, and fun money. 5. Declutter daily

[00:04:57] [SPEAKER_00]: A little bit of decluttering every day not only helps to maintain your space,

[00:05:01] [SPEAKER_00]: but it also saves you time and frustration. For instance, it's easier to recycle your junk mail

[00:05:08] [SPEAKER_00]: and file important mail as soon as it comes in the house than it is to deal with a teetering

[00:05:14] [SPEAKER_00]: pile of paper when you realize you can't find your cousin's wedding invitation.

[00:05:19] [SPEAKER_00]: Managing your finances should also be a similar daily habit. Make it a part of your

[00:05:25] [SPEAKER_00]: daily routine to log into your bank account, check your balances, and look over your purchases.

[00:05:31] [SPEAKER_00]: This will help you keep track of where your money is and what it's doing,

[00:05:34] [SPEAKER_00]: and it will give you a chance to get ahead of potential problems.

[00:05:41] [SPEAKER_00]: 6. Remember it's a journey

[00:05:44] [SPEAKER_00]: Both minimalism and good financial health require regular maintenance. Neither process

[00:05:50] [SPEAKER_00]: is a one-and-done job as you will always have to maintain your decluttered home

[00:05:54] [SPEAKER_00]: and your budget. There will always be items that need to be put away or decluttered from your home,

[00:06:01] [SPEAKER_00]: and there will always be money coming into and flowing out of your life.

[00:06:05] [SPEAKER_00]: It's helpful to think of both processes as being similar to laundry. These jobs are never

[00:06:11] [SPEAKER_00]: done. Just as you must sort, wash, dry, fold, and put away your clothes on at least a

[00:06:17] [SPEAKER_00]: weekly basis, you need to make decluttering and checking in on your finances a regular

[00:06:23] [SPEAKER_00]: habit. These six strategies are the basis for creating both a serene and decluttered home

[00:06:29] [SPEAKER_00]: and a well-managed and stress-free budget. Committing to these strategies can help you

[00:06:35] [SPEAKER_00]: feel more in control of your life and finances, and more connected to the things that matter most

[00:06:40] [SPEAKER_00]: to you. You just listened to the post titled Six Ways to Apply Decluttering Principles to

[00:06:50] [SPEAKER_00]: Your Finances by Emily Guy-Burkin with becomingminimalist.com, and I'll be right back with my commentary.

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[00:08:03] [SPEAKER_00]: tracking spending is like a form of organization that doesn't get to the root of any issues

[00:08:09] [SPEAKER_00]: with overspending. But I still think that tracking your spending is the first step to

[00:08:15] [SPEAKER_00]: coming up with a good budget because it gives you a clear picture of where your money's going.

[00:08:21] [SPEAKER_00]: Many people have a general idea of their expenses, but often underestimate how much

[00:08:27] [SPEAKER_00]: they spend in certain areas like dining out, entertainment, or impulse purchases.

[00:08:32] [SPEAKER_00]: By tracking every expense for a period of time, say a month, you can gather real data that

[00:08:39] [SPEAKER_00]: reflects your spending habits, not just your assumptions. Fixed expenses like rent and

[00:08:46] [SPEAKER_00]: utilities are non-negotiable and typically stay the same each month. Variable expenses

[00:08:52] [SPEAKER_00]: like groceries or entertainment fluctuate, and this is where you can make adjustments.

[00:08:58] [SPEAKER_00]: Knowing this distinction is essential when creating a realistic budget

[00:09:02] [SPEAKER_00]: because it helps you prioritize spending and set achievable goals.

[00:09:08] [SPEAKER_00]: Another benefit is the accountability factor. When you're tracking your spending,

[00:09:12] [SPEAKER_00]: you become more mindful of your financial choices. It's harder to justify a splurge

[00:09:18] [SPEAKER_00]: when you know you'll have to record it later. Tracking your spending is an essential first

[00:09:24] [SPEAKER_00]: in developing a budget because it provides a detailed, honest view of your financial habits.

[00:09:31] [SPEAKER_00]: Armed with this knowledge, you can create a budget that accurately reflects your lifestyle

[00:09:36] [SPEAKER_00]: and goals. But that'll do it for another edition of Optimal Finance Daily. I'll be

[00:09:41] [SPEAKER_00]: back tomorrow as usual, so I'll see you there for the Wednesday show where your optimal life

[00:09:46] [SPEAKER_00]: awaits.