5 credit card myths you shouldn’t believe
With challenger banking services such as Monzo and Revolut quickly making it onto the scene and...
If you haven’t already come across her, let me introduce you to Marie Kondo – she could transform your 2019, as she has transformed mine.
A best-selling author and an ‘organising consultant’ (that really is her job title), her most notable book, The Life Changing Magic of Tidying Up, became a phenomenon in 2011. And she’s back again to help us start the new year: except this time, she’s bringing it to life on our screens in Netflix’s newest series, Tidying Up.
The ‘Konmari method’ aims to help you declutter your home by sorting through your belongings by category – not by room, as many do – and help you to keep only the things that ‘spark joy.’
I’m hooked. Eight binged episodes, seven donation bags, six arguments, five cups of coffee, four items for sale, three trips to the rubbish bins, two days’ effort and one very tidy flat later; I found myself with at least 60% less ‘stuff’ and on a tidying high.
It also got me thinking, what would really spark some more joy in my life? Quite simply, money! They say it can’t bring happiness, but I’d rather have more than less.
And that’s exactly why I found myself sitting on the floor at one o’clock in the morning, surrounded by six months of bank and credit card statements, analysing every subscription and recurring payment with a thick red pen.
I tackled my finances the same way I tackled my flat: by category. And I came up with three general categories as a guide, so let’s ‘KonMari’ our finances:
‘There are three approaches we can take toward our possessions: face them now, face them sometime, or avoid them until the day we die.’ – Marie Kondo
Kondo always starts with your clothing because it’s meant to be the easiest thing to go through and decide if it ‘sparks joy’. It’s also where people tend to be a little hoarder-ish. I find the same is true for subscriptions. I found not one but two app subscriptions that I had completely forgot about! Two minutes later and they were both cancelled – and yes it’s only £6.98 a month, but think of it as an extra £83.76 a year in your ISA or emergency fund.
I recommend going through all your statements and writing down all the subscriptions, – monthly or otherwise – into categories of their own. Think entertainment, shopping, hobby, wellbeing, etc, and work through those lists in the same fashion as you would a pile of jumpers – one by one.
There are some payments you just can’t stop – the 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. For example, when I called to complain about the price of my phone bill and threatened to switch, the provider was quick to offer an extended ‘introductory’ offer, despite my having been a customer for over three years. No actual change was necessary and I still saved £9.99 a month – not to bad for only ten minutes on hold. The same can be said for car insurance, energy, broadband, you name it.
There are also some bills that may not bring you joy – but do bring joy to other family members. For example, I have a love/hate relationship with the cost of having TV – especially when it comes to sports packages – why oh why do we need both BT Sport and Sky Sports? Only my husband can answer that. To him, both spark joy.
Taking a closer look at your debt is not only a good habit in general but, with the KonMari method, we’re looking to ‘simplify’ or consolidate. So take a look and see if again you can switch providers to get a better deal or even consolidate to enjoy fewer or lower monthly payments. Or go into full tidy mode and pay them off early!
Now that you’ve been through your subscriptions, bills and debt – chances are you’ve found some ‘extra’ money laying around. From forgotten app fees, my beloved monthly shoe subscription, even my husbands sky sports package, I’ve suddenly found an ‘extra’ £115 a month in my accounts, and that definitely sparks some joy in my life.
What to do with the extra money? Put it to better use, of course. You have two main choices: savings or investments. If you need to top up your emergency fund or savings, use this as an opportunity to set up a standing order.
Otherwise, why not consider topping up your monthly ISA contributions with one of these three funds:
This fund invests in companies of all shapes and sizes across Europe. The manager’s focus is on companies with a likelihood of earnings and growth surprise, taking investment opportunities as they arise. He invests in businesses with medium to long-term earnings power, as well as those in a restructuring and turnaround situation.
This fund gives investors access to the higher growth Asian economies, excluding Japan, but including Australia and New Zealand. It has an income focus, which means it is likely to be less volatile than most other Asian funds. The investment process is well thought out and has been implemented with diligence and skill.
If you prefer sticking closer to home, this core equity income fund invests in high yielding UK stocks, with a particular emphasis on companies that generate enough cash to achieve sustainable dividend payments. The manager has a pragmatic approach aiming to make sure the portfolio is suitable for all types of market conditions.
We’ve all got that one cupboard or draw that is full of things we have no other home for. The one area even Kondo may have trouble getting us to tackle. You know the one. It contains batteries, spare keys, blue tack, note pads, football studs… Don’t let your finances become the junk drawer you never open and try to forget.