Declutter: What you need to do for everything, including finance.

Leonardo da Vinci once said that “simplicity is the ultimate sophistication.” This quote still stands very true for everyone today and for everything, be it mind or heart, relationships, home, work or money. One of the best ways to achieve simplicity is to declutter. In this article, we will attempt to make a case for decluttering and how to do it.

Why declutter matters?

There are obvious benefits for decluttering are many. We live in a world of many. Today getting anything is very easy, just a click away. There are many distractions, updates, communications, events happening at virtually every second. The world today is smaller and we find a lot of things happening around us. Often we find our head spinning with so many choices around us. Here are the obvious benefits we will enjoy once we walk on the path to decluttering.

• Saves time: by removing time we spend on unnecessary things

• Make better choices: making by removing unnecessary things /details

• Helps prioritise: from among many things

• Bring focus: on things which are really needed

• Aids memory: by reducing the things we need to remember

• Being consistent: by simplifying things

• Get peace: by removing complexities

How to declutter and achieve simplicity?

Simplicity is something that many of us desire but many do not know how to do so. Here are the important steps to do so.

• Target: The first step is to decide what to declutter? Since almost everything around us may be decluttered, deciding where to start is an important step. Chose an area or subject which you feel requires urgent attention and has been draining you out mentally or physically. This could be your finances, relationships or even your kitchen or wardrobe.

• Learn: The second step is to learn how clutter and lack of simplicity are impacting your time, productivity, money, etc in your chosen area. Have a closer look at everything going in there. In case you are looking at your finances, just observe how many financial transactions, holdings, investments, accounts, advisors and such other complexities are there. Are they too many? Understand what and how you have been at a disadvantage due to this.

• Prioritise: The next step is to prioritise. What is the most important? What is the one thing you can and cannot live without? Organising into important and not important is an important step and you really would need to be strict here. Keep doing this till the time you feel you have a shortlist of the most important things that matter.

• Reduce: Once you have prioritised, the most critical action now is to remove the things you do not need or do not really carry any real value for you. In finances, one could do this by consolidating your investments, closing unused accounts, closing policies that do not serve the real purpose of protection, moving portfolio with only one advisor, reducing debt, and so on. One has to be very ruthless here to remove things that do not matter.

• Add: It would be rare that you would need anything to be added to your chosen target area of decluttering. However, it is possible and perhaps even a good time to add the most important things which you have been missing out since long. In finance, a comprehensive financial plan could be the one thing you are likely to be missing out.

In short, here is what we have done – subtract the obvious and add the meaningful. That is what declutter and simplicity is really about. Remember that you have succeeded in life when all you really want is only what you really need.

Simplicity in finance:

• Simple expectations: The major reason for mistakes, frequent churning and bad product choices is often exaggerated expectations. We need to have sound, grounded and long-term reasonable expectations and hold on to same at all times.

• Declutter portfolio: Most of us would likely have many insurance policies, bank FDs, small saving schemes and even mutual funds and equities. Time to have a strategy and remove the products that do not add real value.

• Prioritise your goals: One needs to prioritise one's goals. Often the random, small goals are given priority at the cost and compromise of long term big goals. This has to stop

• Have steady plans: Frequent changing of your plans has many costs attached to it. Have a comprehensive financial plan and stick to it.

• Have discipline: Disciplined savings over the long term is the ideal and easiest way to create wealth. Start a SIP, keep growing your SIP and forget about it.

• Reduce expenses: If you look around, there are many unnecessary expenses around you. This is impacting your financial well-being, one expense at a time.

• Do not run after ideas: Do not chase ideas or stock tips or get rich quick schemes. It does nothing but adds uncertainty and complexity to your finances

• Do not make too many mistakes: Not making too many mistakes or big mistakes in life is the surest way of letting your money grow and not protecting you from financial shocks.

Socrates once said, “the secret of happiness, you see, is not found in seeking more, but in developing the capacity to enjoy less.” If we all live to this principle in our lives, I am sure that our lives will be much happier, peaceful, rewarding and healthy. Let us commit ourselves to simplicity in all aspects of our lives and declutter thing which weighs us down, physically, mentally, emotionally and financially.