3 Tips for Financial Decluttering: Prune These Bad Money Habits So You Can Save More

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You likely know the feeling of standing in the doorway of a room you’ve allowed to get a little messier than you’d like. Life got in the way, as life is prone to do, and you’re facing piles of clothes, half-opened boxes of goodness knows what, and assorted bric-a-brac everywhere. You know you should have tackled the mess sooner, and now it’s twice as big and you’re feeling twice as rushed. 

The same phenomenon can happen with your finances. You get busy. Life gets hard. And then you open your account statement, just like you open your door, and you sigh. Yet just like folding your clothes and putting them away right away can alleviate clutter, taking some proactive actions can keep your finances clear and open to growth.

1. Not Separating Wants From Needs

If you can master this skill, then you’ll solve both of your clutter problems at once. Scrolling your phone can yield a plethora of shoppable goodies, like fast food, and clothes, and gadgets galore (oh my!). You figure, it’s just one purchase — what’s the harm? Then one becomes two, and two becomes, well, more than two, and before you know it, your checking account is as empty as your closet is full. 

It’s time to put yourself on a shopping and spending moratorium for anything that you absolutely don’t need to survive. Yes, go grocery shopping. No, don’t get another pair of sneakers you likely won’t wear for months. Frankly, while you’re at the grocery store, you should also have a list on hand to keep you from overspending on things you won’t eat quickly enough — and stick to it. 

2. Neglecting Your Debt

Look, nobody wants to think about their debt. It’s more scary than scintillating as a topic (unless you’re getting the hot goss about which celebrity is in trouble with the IRS). But if you want to declutter your life financially, you’re going to have to get really familiar with your debt. 

Take a deep breath. Do whatever you have to, within reason (changing your name and fleeing the country isn’t an option), to get yourself to the table and review your debt. Look at everything you owe, from credit card debt to student loans and any personal loans. Determine your monthly obligations, interest rates, and payment due dates. Write it all down, either with old-fashioned pen and paper or in a spreadsheet on your computer. 

From there, figure out how you want to approach that debt. Working with a financial advisor or other expert can help. Or, you can find an approach like the snowball method (paying off smaller debts first) or the avalanche method (tackling high-interest debt first). But you can’t choose a strategy until you’re actually willing to confront your debt. 

3. Forgetting Your Emergency Fund

If there’s one constant in life and money alike, it’s to expect the unexpected. A warning light comes on in your car that really, really — and you do mean really — should not be coming on. That cough won’t go away. Your beloved pet got into some food that they decidedly shouldn’t have. They’re okay, but the vet bill costs several hundred dollars.

You’ve got to pay for all of this, and if you don’t have a stable emergency fund, you’re probably dipping into other accounts to cover it all. Or worse, you’re putting it on a credit card or taking out a loan. All of this leads to financial chaos and clutter. 

Building up a dedicated emergency fund that you contribute to regularly is vital to streamlining your finances. One of your best bets is to open a high-yield savings account, where your money can earn interest over time. This not only grows the amount you have on hand for unexpected expenses but also keeps you on track with your other savings and debt-repayment plans. 

You don’t have to live with financial clutter. If you’re willing to sweep away your bad spending habits, adopt a strategy for paying down debt, and tidy up your approach to building an emergency fund, you can breathe in the fresh, clear air of decluttered finances. 

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