At ReclaimYou, Financial Clutter is one of the 6 types of clutter that we recognise, that has the potential to make living an uncluttered life a bit tricky.
When we talk about decluttering, we often picture clearing physical spaces like our homes and offices. But there’s another type of clutter that can cause just as much stress: financial clutter. Disorganised finances can leave you feeling overwhelmed, anxious, and out of control. At ReclaimYou, we believe that decluttering your financial life is just as important as organising your physical surroundings.
What is Financial Clutter?
Financial clutter is the accumulation of unorganised, unmanaged financial information. It can come in the form of unpaid bills, forgotten subscriptions, scattered receipts, and unclear budgeting. Like physical clutter, it can create unnecessary stress and make it difficult to achieve your goals, both in life and in business. It can also heavily contribute to the physical clutter in your home.
Just like organising your home, you can reclaim control over your finances with simple, mindful steps. Let’s dive into how you can start decluttering your financial life.
1. Start with a Financial Audit
Before you can get organised, you need to know what you're working with. A financial audit is the first step to clearing financial clutter. This involves:
- Listing all your income sources
- Recording your monthly expenses
- Reviewing your debt (mortgages, loans, credit cards)
- Checking your savings and investment accounts
You might want to gather all your paperwork – from bank statements to loan agreements – or better yet, create digital copies to keep everything accessible and organised. At ReclaimYou, we encourage a digital-first approach to reduce paper clutter, a type of physical clutter.
2. Set Up a Simple Budgeting System
A key part of eliminating financial clutter is knowing where your money is going. Create a simple budgeting system that suits your lifestyle. You don't need fancy apps or complicated spreadsheets if they don’t work for you. Here’s a simple method:
- Fixed expenses: Rent, mortgage, utilities, and insurance should be your first priority.
- Variable expenses: Groceries, transport, and entertainment come next. Try to keep these manageable.
- Savings and investments: Aim to set aside a portion of your income every month. Even small amounts add up over time!
If you're juggling irregular income, such as freelance work or business earnings, consider separating your personal and business accounts. This reduces confusion and helps you track your spending with clarity.
3. Automate Where You Can
Automation is a great way to reduce financial clutter. Set up automatic payments for bills, subscriptions, and savings contributions to avoid late fees and missed payments. This ensures your essentials are taken care of without needing constant attention.
Also, regularly review your subscriptions and cancel any services you no longer need. These forgotten expenses can add up and contribute to unnecessary financial clutter.
4. Organise Financial Documents
A cluttered mind often mirrors a cluttered environment. Digital clutter can be just as overwhelming as physical clutter, so it's crucial to create an organised system for your financial documents.
- Go digital: Scan important documents and organize them in clearly labeled folders on your computer or cloud storage. Backup sensitive information to ensure it’s safe and easily accessible.
- Purge unnecessary paperwork: Shred old bills, expired warranties, and outdated contracts. Keep only what’s necessary for tax or legal purposes.
- Use software: Personal finance tools like Mint or YNAB (You Need a Budget) can help you track your expenses and maintain a clear picture of your financial health in one place.
5. Declutter Your Debt
Debt is one of the biggest sources of financial clutter. Organising and simplifying your debt can help ease this burden. Here’s how to start:
- List all your debts: Include everything, from credit cards to loans, and note the interest rates, monthly payments, and outstanding balances.
- Create a debt repayment plan: There are two popular methods for paying off debt: the snowball method (pay off the smallest debts first) and the avalanche method (tackle the debt with the highest interest rate first). Choose the one that best suits your financial situation and motivation level.
- Negotiate or consolidate: If your debt feels overwhelming, you can negotiate with creditors for better terms or consolidate multiple debts into one with a lower interest rate.
1. MoneyTalks
MoneyTalks is a free financial helpline funded by the Ministry of Social Development (MSD). It provides confidential budgeting advice, support with debt, and information about government services. You can contact them via phone, text, email, or live chat.
2. Budgeting Services from FinCap (Financial Capability Network)
FinCap oversees a network of budgeting services across New Zealand. These services provide free, confidential financial advice and assistance. The organization helps individuals and families get control over their finances, work out repayment plans for debt, and manage household budgets.
3. Citizens Advice Bureau (CAB)
CAB offers free budgeting advice and financial support through its local branches. Their advisors can help with everything from managing debts to accessing financial benefits and entitlements.
4. Sorted.org.nz
Sorted is an independent government-backed website that offers a wealth of resources to help New Zealanders manage their finances. It provides free tools such as budgeting calculators, retirement planning guides, and debt repayment strategies.
5. Nga Tangata Microfinance
Nga Tangata Microfinance provides small, interest-free loans to help individuals avoid predatory lenders and manage debt. They also offer budgeting support and financial mentoring to ensure borrowers can repay their loans and improve their financial situation.
6. The Salvation Army’s Budgeting and Financial Mentoring Services
The Salvation Army provides free budgeting advice and financial mentoring through its community centers across New Zealand. Their advisors help people manage debt, understand government support options, and create effective budgets.
7. Christians Against Poverty (CAP)
CAP is a Christian organization offering free debt counseling and budgeting services. They help families manage their finances, work out debt repayment plans, and provide long-term support to achieve financial stability.
8. Family Works – Presbyterian Support
Family Works offers budgeting support as part of their family services. They help families create sustainable budgets, manage their debts, and access financial support. They provide one-on-one budgeting advice tailored to individual needs.
9. Dove Hawkes Bay
Dove Hawkes Bay is a local organization that offers support services for families, including budgeting advice and financial support. They help people create manageable financial plans and access resources to improve their financial well-being.
10. Te Puni Kōkiri (TPK) – Whānau Ora
Te Puni Kōkiri, through the Whānau Ora initiative, supports whānau and families to develop financial literacy and budgeting skills. The program empowers Māori families to create positive financial futures through holistic, culturally-based support.
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Review Regularly
Financial organisation isn’t a one-time event. To keep your finances clutter-free, schedule regular reviews. This could be weekly, monthly, or quarterly, depending on what works for you. Use this time to check your budget, adjust for upcoming expenses, and ensure your financial goals are on track.
At ReclaimYou, we recommend setting aside time each month to look over your finances, just like you would when decluttering your home. This helps you stay proactive and avoid letting small financial issues snowball into bigger problems.
7. Focus on Financial Goals
Decluttering your finances also means having clear goals. What are you working toward? A home renovation? A family vacation? Paying off debt? By focusing on your financial goals, you can allocate your resources more effectively and avoid unnecessary expenses that don’t align with your priorities.
Decluttering isn’t just about making your home look tidy; it’s about creating a sense of control and peace in every area of your life. By tackling financial clutter, you can reduce stress, improve your financial health, and feel more in control of your future.
At ReclaimYou, we believe in empowering you to take charge of all aspects of your life. Start decluttering your finances today, and reclaim your time, energy, and peace of mind!