I have started to tackle this clutter bit by bit. It’s all been a series of baby steps, and I know there are still more steps to take.  

Facing the Financial Clutter

This past month, I’ve been clearing out the clutter of old files in my desk drawers to make room for the active files I’m currently using. I’d hoped to have it completed by now, however it’s not; I’m finding it a slow task, going through each sheet of paper in these files, shredding anything that’s a potential source for identity theft. It’s a real eye-opener to see what I thought would be important to save 10 years ago!

Interestingly, I’d originally thought these desk drawers represented physical clutter but I can see that they more accurately represent mental and financial clutter. I was (and to some extent still am) fearful of throwing away receipts and paperwork that I imagine I might need down the road—and I have a vivid imagination! I also never had a consistent savings plan in place, so uncertainties of my financial future were a source of great anxiety, and instead of dealing with it, I suppose it was easier to stuff the paperwork in a file to be dealt with at a later time that never arrived.

I have started to tackle this clutter bit by bit. It’s all been a series of baby steps, and I know there are still more steps to take. Here are the changes I have made in the past year to reduce the mental clutter around my finances:

I participate more actively in building my retirement plans. This involved many baby steps: 1) accepting the fact that I needed to divert dollars each paycheck into my retirement accounts; 2) learning about the various plan options available to me; 3) thinking through the potential budget impact this would have; and 4) actually making the commitment decision and sending in the paperwork. I agonized for several days over what percent to divert into which plan, and finally said to myself, “oh good grief, just put down a minimum for each and adjust it down the road”. The point was to just get the process started and see what the impact to my net income would be, and indeed, the next month I felt comfortable enough to adjust the percentages and increase my savings. Of course, some immediate advantages to all this are the reduction of my taxable income, and the knowledge that I’ve taken a proactive step towards planning financially for my retirement. Better late than never.

I also actively save more of my net income each month. The adage “pay yourself first” has validity, and so I increased the amount of the automatic transfer from my checking account to savings account that takes place with each paycheck deposit. As debts were paid off, most months I put the amount previously sent to my creditor directly into my savings. I’m consciously setting aside money to pay for the big items that come up annually, such as homeowner’s insurance and income taxes, and yes, attending the annual Stitching Festival.

I pay closer attention to where my money gets spent. I actually have less disposable income this year than last because of my saving strategies combined with cost of living increases. So I find ways to be frugal, be it coupon clipping, watching for sales, and bringing my lunch to work more often. When I think about the vision I’m creating for my financial future and what I want to spend my money on, it makes it a little easier to skip a few lattes and lunches and movies so I can achieve those financial goals.

I still have a lot of financial clutter to clear out—the files in my desk drawers and closet attest to that. I’m taking it one file at a time, and every one I go through and shred eliminates just a little bit more of the clutter, and frees that much more mental energy for other opportunities. Onward!

Dot Snow - dot.snow@kp.org - 27 March 2005