If there’s one thing I’ve learned about finances, it’s that they can feel overwhelming, even suffocating at times. Many of us have heard the advice: “Track where every dollar is going” or “Get a grip on your spending.” But how do you actually do that? Where do you start when your finances feel like a cluttered mess? Let me walk you through a step-by-step approach to decluttering your finances, with actionable tips and lessons I’ve learned from my own struggles. Let’s tackle this together—with grace, patience, and a little bit of determination.
My Own Financial Clutter Story
For a long time, my finances felt like a chaotic closet. You know the kind—crammed with random stuff you keep meaning to sort through, but every time you open it, you slam the door shut again. I’d tell myself I’d deal with it “later,” but later never came. Bills would pile up, surprise expenses would hit, and I’d have no idea where my money had gone.
At one point, I realized I was paying for multiple streaming services I rarely used, impulse buying things I didn’t need, and scrambling to cover unexpected expenses. It was exhausting. I felt guilty, anxious, and, honestly, a little hopeless.
But here’s the thing: I wasn’t hopeless—I was just overwhelmed. What I needed wasn’t a perfect budget or to suddenly become a financial expert. I needed a system, a starting point, and the permission to take small, steady steps forward.
If this sounds familiar, you’re not alone. Let’s break it down together, step by step, so you can take control of your money and create a sense of peace around your finances. Follow along with me on this mindful journey, and let’s embrace the opportunity to declutter our finances together. Don’t forget to share your thoughts or tag me on Instagram, Pinterest, or Facebook as we tackle this together.
1. Gather Everything Together
The first step to decluttering your finances is like tackling a messy room—you need to see what you’re working with. Start by gathering all your financial information in one place.
What to Collect:
• Bank statements (checking and savings accounts).
• Credit card bills.
• Loan or debt statements.
• Bills (utilities, rent/mortgage, subscriptions).
• Pay stubs or income records.
When I first started this step, I avoided it for weeks. Just thinking about gathering all those statements gave me anxiety. What if it was worse than I thought? But I told myself, “This is just step one. You don’t have to fix anything today. You just have to look.” Once I had everything in one place, it felt less scary—just numbers on paper.
Actionable Tip: If you feel overwhelmed, take it slow. Set a timer for 15 minutes and focus on one category, like gathering your utility bills. Break it into smaller sessions if needed.
2. Track Where Your Money Is Going
Before making changes, you need to know where your money is currently going. Tracking your spending gives you a clear picture of your habits and patterns.
How to Track:
• Use a notebook to write down every expense.
• Create a spreadsheet to categorize spending.
• Try apps like Mint, YNAB (You Need a Budget), or Goodbudget for automated tracking.
The first time I tracked my expenses, I was shocked. I’d always thought of myself as frugal, but seeing the numbers in black and white was eye-opening. I realized I was spending over $50 a month on late fees because I kept forgetting bill due dates. Those little mistakes were costing me big.
Actionable Tip: Start by tracking just one week of expenses. You don’t have to go back months—focus on building awareness moving forward.
3. Identify Spending Patterns
Once you’ve tracked your expenses, look for patterns. Are there areas where you’re overspending? Subscriptions you forgot about? Impulse purchases that add up?
What to Look For:
• Recurring Charges: Are you paying for services or memberships you no longer use?
• Impulse Buys: Do you tend to shop out of boredom or stress?
• Surprise Expenses: Are there “hidden” costs, like late fees or unexpected repairs, that keep popping up?
I discovered I had three subscription services I hadn’t touched in months, totaling $40 a month. That’s nearly $500 a year on things I didn’t even use! Canceling them felt like a small win, but it was a win nonetheless.
Actionable Tip: Print out your bank statements and highlight recurring charges. Cancel anything you don’t use regularly.
4. Categorize Your Spending
To declutter your finances, you need to sort through your spending. Categorizing expenses helps you understand where your money is going and which areas might need adjustment.
Common Categories:
• Housing.
• Utilities.
• Food (groceries and dining out).
• Transportation (gas, public transit, car payments).
• Debt Payments (loans, credit cards).
• Entertainment (subscriptions, outings, hobbies).
• Savings.
I found it helpful to use color coding when categorizing my spending. Seeing my grocery expenses in green and my dining-out expenses in red made it easy to spot where I was overspending.
Actionable Tip: Use a budgeting app (I like NerdWallet!) that automatically categorizes your spending for you, or create a simple pie chart in Excel for a visual breakdown.
5. Prioritize Your Expenses
Now that you’ve categorized your spending, it’s time to rank your expenses by importance.
Prioritize Like This:
1. Essentials: Rent, utilities, groceries, transportation, minimum debt payments.
2. Savings: Emergency fund, retirement, or specific goals.
3. Non-Essentials: Dining out, subscriptions, shopping.
This step helped me confront my spending habits head-on. I realized I was prioritizing wants over needs, like splurging on takeout when my pantry was full of ingredients.
Actionable Tip: For non-essentials, ask yourself: “Does this align with my values and goals?”
6. Set Financial Goals
Goals give your budgeting purpose. Without them, it’s easy to lose motivation.
Examples of Goals:
• Build an emergency fund ($1,000 in 6 months).
• Pay off high-interest credit card debt ($500 extra toward payments each month).
• Save for a vacation ($100 a month for a year).
My first big goal was building a $1,000 emergency fund. It felt impossible at first, but breaking it into smaller chunks ($166 a month) made it manageable. Each time I hit a milestone, I felt proud and motivated to keep going.
Actionable Tip: Write down your goals and keep them somewhere visible to remind yourself why you’re making these changes.
7. Create a Simple Budget
Your budget doesn’t need to be perfect or complex—it just needs to work for you.
A Basic Budget Includes:
• Income: Total monthly earnings.
• Fixed Expenses: Rent, utilities, loan payments.
• Variable Expenses: Groceries, dining out, gas.
• Savings: Money allocated toward your goals.
• Fun Money: A small amount for guilt-free spending.
I used to think budgeting was restrictive, but it’s actually freeing. Knowing exactly how much I could spend on fun things, guilt-free, took away a lot of anxiety.
Actionable Tip: Use the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings and debt repayment.
8. Automate Where You Can
Automation simplifies your financial life, helping you stay consistent with your budget and avoid unnecessary stress.
Ways to Automate Your Finances:
• Bill Payments: Schedule automatic payments for rent, utilities, and credit cards to avoid late fees.
• Savings Transfers: Set up recurring transfers to your emergency fund or savings goals.
• Debt Repayments: Automate minimum payments (or more) for loans or credit cards.
I used to dread missing deadlines for bills, but automation turned that stress into peace of mind. Knowing everything is handled in the background lets me focus on my goals.
Actionable Tip: Start small by automating just one bill or savings transfer this month. Build from there!
9. Declutter Subscriptions and Small Expenses
Little recurring charges add up fast. Decluttering your subscriptions can free up cash for the things that truly matter.
Questions to Ask When Reviewing Subscriptions:
• Do I use this regularly?
• Is it adding value to my life or goals?
• Could I live without it for now?
When I took a closer look at my subscriptions, I realized I was paying for services I hadn’t used in months. Canceling them freed up money I could put toward savings.
Actionable Tip: Use an app like Rocket Money or Truebill to identify and cancel unused subscriptions effortlessly.
10. Review and Renegotiate Fixed Expenses
Even fixed expenses like rent, internet, or insurance are negotiable. A quick review of these costs could uncover opportunities to save.
How to Save on Fixed Expenses:
• Call Your Providers: Ask about promotions, discounts, or bundling options.
• Shop Around: Compare rates for utilities, insurance, or cell phone plans.
• Review Your Bills: Look for hidden fees or unnecessary add-ons you can remove.
I once called my internet provider and saved $20 a month with just a five-minute conversation. Those small savings really add up over a year!
Actionable Tip: Schedule one “bill review” day a year to make calls and check for savings opportunities.
11. Build an Emergency Fund
An emergency fund gives you peace of mind, acting as a financial safety net for unexpected expenses like car repairs or medical bills.
Steps to Build an Emergency Fund:
• Start Small: Aim for an initial goal of $500 or $1,000.
• Make It Automatic: Set up recurring savings transfers, even if it’s just $10 a week.
• Save Windfalls: Put bonuses, tax refunds, or gift money directly into savings.
When I hit my first $500 in my emergency fund, I felt so much more secure. Knowing I had a cushion helped me sleep better at night.
Actionable Tip: Open a separate savings account just for emergencies to avoid temptation.
12. Check In Regularly
Your budget isn’t a “set it and forget it” tool. Regular check-ins help you celebrate wins and make adjustments as needed.
Tips for Monthly Budget Reviews:
• Track Your Spending: Compare actual expenses to your budget categories.
• Celebrate Successes: Did you save more or stay under budget in a category? Acknowledge it!
• Adjust as Needed: Life changes—so should your budget.
I set aside 30 minutes on the first of every month to review my finances. It keeps me mindful, motivated, and on track with my goals.
Actionable Tip: Add a recurring reminder to your calendar for a monthly budget review. Make it a ritual with a cup of coffee or tea!
Declutter Your Finances, Declutter Your Life
Taking control of your finances isn’t about perfection—it’s about consistent, small steps toward clarity and peace of mind. Whether it’s canceling an unused subscription, tracking your spending for the first time, or building an emergency fund, each small action adds up to big progress.
Let’s embrace this journey of financial mindfulness together. I’d love to hear how you’re decluttering your finances! Share your tips and experiences in the comments, or tag me on Instagram, Pinterest, or Facebook. Don’t forget to subscribe to my newsletter for more cozy, mindful living tips and inspiration.
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Disclaimer
Cas Lin
Small Possibilities
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