Thanks to Marie Kondo, I now can't look at any item in my closet without thinking to myself: "But does it spark joy?"
Ever since the runaway success of the eternally cheerful, sprightly organisation guru and her KonMari method, which was most recently featured in the Netflix series Tidying Up With Marie Kondo, it seems people everywhere are now rethinking their worldly belongings by doing one simple thing: choosing joy.
But what does "choosing joy" even mean? And if we can incorporate joy into our lives by optimising our physical spaces, can we do the same with our finances?
We spoke with Brenna Casserly, the cofounder and CEO of Emperor Investments, to help us shed light on what sparking joy in our finances might look like. At Emperor Investments, Casserly helps millennials achieve their financial goals, and she believes that Marie Kondo might be on to something when it comes to furthering that mission. Ahead are five tips to get you started.
1. Create your own financial categories.
Marie Kondo's KonMari method asks people to tidy their lives by category — such as clothes, books, papers, miscellaneous, and sentimental items. But when it comes to our bank accounts, clearly these buckets don't exist automatically. Casserly believes the first step toward a joyful bank account is to break your budget down into compartments.
"The first thing I would do, similar to how Marie organises clothes, is to look at the last couple months of your bank statements, go through each transaction, and put it into a category," Casserly says. "That way you know where your money has been going and can understand your own spending behaviour." These categories might include living expenses — such as your rent or mortgage, utility bills, groceries, medical, loan payments — and savings goals, and should absolutely always include a "fun" category.
2. Get specific about your goals.
Once you're done creating your categories, Casserly recommends outlining your long-term financial goals and identifying how much money you’ll need to set aside per month to reach them.
"Ideally, you should save 20% of your income each month, but don’t let someone else’s ideals discourage you," Casserly says. "Save as much as you can while still living a happy life, even if it’s only £25 per month. Once you grow your income, you can increase your savings while maintaining a lifestyle you’re already happy with."
When you’re done planning out your goals and allocating money for them, you can de-stress a bit by focusing on your fun category. This bucket could include anything as broad as "entertainment" or specific as "bar fund."
When it comes to actually putting money aside, Casserly recommends setting up an automatic transfer to your savings account every time you get paid. This way, you don't have the chance to think of what you could have purchased with that money.
"If you really struggle with self-control, you can deposit your entire paycheque into your savings account," Casserly says. "That way, taking money out for leisure expenses psychologically ‘hurts’ more and you’re less likely to do it." However, she urges people to be aware of charges involved with savings-account withdrawals.
No matter what your personalised buckets are, Casserly says that a good rule of thumb to double-check you're on the right track is to subtract your income from your budget — you should always get zero.
3. "Clean out" your expenses.
Creating financial categories and setting goals are important, but sometimes you also need to give your bank account a good old-fashioned clean-out. One thing Casserly recommends is re-evaluating your recurring subscriptions.
"For example, you can probably wait a few extra days for delivery and save money on Amazon Prime — this will also discourage you from buying random stuff that you don’t actually need," she explains. "And while Netflix is basically a necessity at this point, see if you can split a family account with a few friends, or be like the rest of us and use your best friend from college’s account."
4. Make sure you have an emergency fund.
Casserly, like many other financial experts, stresses the importance of creating an emergency fund. In fact, you should make it one of your financial goals. Knowing you have a safety net can bring a lot of ease, which can be joyful indeed. With a rainy-day fund, you'll rest assured that whatever comes your way — sudden unemployment, say, or an accident — you'll be in a better position to handle it. Without one, an unforeseen expense could create a bigger mess, especially if you're forced to create debt to cover it. As Casserly says, "the last thing you want is to be paying interest on your credit card bill!"
5. Get real about what's actually joyful for you.
The idea of joyful spending can be an abstract concept, but Casserly recommends getting into the habit of asking yourself whether an expense actually makes you happy (or whether it simply gives you a momentary high).
"If you get into the habit of asking yourself if [a] purchase will ‘spark joy,’ your finances will thank you for it," Casserly says. "Once you decide to start and commit to a budget, it will be even easier to say no to things that won’t add any value to your life."
Regardless of how much money you're currently making, applying the KonMari method to your personal financial situation is likely to change your perspective — especially if you're dealing with debt and aren't sure where to start. Then, Casserly adds, "once you’re ready, you can start investing and building your best life."