Get Organised: tidying up your finances

Last year was all about ‘sparking joy’ with Marie Kondo. This year is all about ‘organising with colour’. The newest Netflix original series, Get Organised, follows The Home Edit team and, more specifically, founders Clea and Joanna. I was completely sucked in from the first episode – not only am I obsessed with organisation (my closet has been colour organised for as long as I can remember) but the A-list guests on the show are excellent. The programme pairs perfectly with a bowl of popcorn and some champagne! The professional organisers aim to bring both function and beauty to your everyday life. They can teach you how to organise your kitchen, closet, home office, and even a basement playroom if you’re Neil Patrick Harris. But one thing they don’t organise? Your finances.

“For every minute spent organising, an hour is earned.” — Ben Franklin

How to edit your finances

The Home Edit mentality is all about embracing your life – whether you’re a busy mum, one of three roommates, or someone who’s always traveling for work. You just need to know how to set up a system that works for you. The key to organising is starting with something achievable so that you succeed. It’s the same with your finances. You need a system that works for you.

My system is a very complex spreadsheet that updates daily and is colour coded by category and subcategory. This is extreme. But so are the rest of my annoying organising habits. Your finance edit can be simple.

The first step is to take everything out and “edit” – or purge – aka my favourite part. Go through everything and get rid of anything you don’t need or want. Of course, some payments are necessities. But you can see if you can trim down the costs, or make sure you are taking full advantage of your current plans and offers.

Next it’s time to categorise everything. Big categories could include subscriptions, bills and debt. You can even make subcategories. Think entertainment, shopping, hobby, wellbeing, etc. Now that your finances are organised, you can easily keep up the process and be less likely to overspend on new subscriptions or shopping sprees.

Hopefully, somewhere along the way of “editing” your finances you found some extra money laying around. Now what to do with the extra money? Put it to better use, or another category: savings or investments spring to mind. If you need to top up your emergency fund or savings, use this as an opportunity to set up a standing order.

How to edit your investment portfolio

For those that already have your investment portfolio started, it’s also a good idea to check in with your investments. And, just as you’d categorise your spending habits, you can categorise your portfolio. When you review your portfolio it’s a good idea to take a step back and re-familiarise yourself with your investment goals. What are they? Have they changed?

Then begin your editing process. Access your holdings and elevate if your portfolio has enough diversification. For example, do you fall victim to home bias? If so, consider adding a global fund such as Lazard Global Equity Franchise or BMO Global Smaller Companies. Perhaps a European fund like Waverton European Capital Growth, or further abroad with Baillie Gifford Japanese Income Growth and LF Miton US Opportunities.

Do your funds’ top holdings overlap or give your overexposure to a specific region or sector? While you might love technology, it’s not a good idea to plough all your money into it. If you’re looking for more specialist investments you might consider Polar Capital Global Insurance or a property investment in Premier Pan European Property Shares.

Another important question is, are you still comfortable with the amount of risk in your portfolio? Although investing is for the long term, rebalancing your portfolio from time to time is still necessary. If you are looking for some added security in your portfolio you might consider a fixed interest fund: Jupiter Strategic Bond, M&G Optimal Income, TwentyFour Absolute Return Credit or Liontrust Monthly Income Bond, for example.

Bottom line: I love good organisation. Some may say I’m slightly OCD, but everything has its place and it’s comforting. And it should be the same with your finances. While I don’t want to help go through pages of bank statements, if you want someone to colour code your closet or organise your books in a rainbow, give me a call!

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.