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A Simple, Happy Life

There's something about organization books that piques my curiosity. Surely one of these guides harbors that elusive secret to taming the torrent of everyday items that stack up at an alarming rate.

On the packrat-Spartan spectrum, I'm pretty average. I get roughly the same amount of junk mail as my neighbors. I'm a pile maker, but the piles don't impede foot traffic. The dog toys and TV remote are never lost for long. And, blessedly, I have a decent amount of closet space.

Still, when a book pledges to deliver "simple solutions for clutter," or reveal the "psychological roots of acquisition," or simply to show me a stylish way to organize the slightly above-average number of shoes I own (like mother, like daughter. I'm trying to break the vicious cycle), I'm hooked.

It just seems to me that an organized life -- examined, dusted, stored, sealed and filed -- must be a happier one.

Contented control freaks
Sure enough, my hunch is right. In researching the money-happiness connection, author Jean Chatzky delved into the lives of generally happy people who felt in control of their finances. In "You Don't Have to Be Rich: Comfort, Happiness, and Financial Security on Your Own Terms," which is excerpted on MSNBC, she reveals "The Three Habits of Financial Happiness."

The secret to a happy, successful life?

Tah daah! It's organization.

Chatzky found that happy people aren't consumed by administrative tasks. Their important financial papers are organized well enough so that they can find them when needed. When a bill comes in, these chipper folks pay it right away instead of waiting for an appointed bill paying/financial bloodletting hour or two that is an emotional drain.

And one more thing. People who regularly balance their checkbooks are more tranquil and happy than the rest of us. Why? They know where their money is going. Their stomachs aren't in knots wondering what effect the roofer's bill will have on their short-term savings stash. They know because they're caught up on their financial homework.

What these three traits reveal is that control is central to financial happiness. So what can we learn about getting organized -- controlling the pileup of receipts, bank records, warranties and whatnots -- from the clutterers crowding the "Organization" aisle at the bookstore?

The urge to purge
Before you stock up on binders, colored Sharpies, a shredder and assorted Tupperware, assess the mess. Perhaps paperwork isn't your albatross, but planning for unexpected expenses throws a wrench in your month. Maybe saving for retirement isn't an issue, but tracking your 12 well-funded IRAs has become overwhelming. Does your beloved Sig Oh handle all of the finances, leaving you with nary a worry in your pretty little head? What if the unthinkable happens?

One of the highly rated clutter control books on is Julie Morgenstern's Organizing from the Inside Out. She first urges readers to identify their organization issues before filling up the Hefty bags. You might not actually need the two-ply variety, after all. She writes in the introduction, "Being organized has less to do with the way an environment looks than how effectively it functions. If a person can find what they need when they need it, feels unencumbered in achieving his or her goals, and is happy in his or her space, then that person is well organized."

After the soul-searching, it's down to the business of de-cluttering. Fool disclosure: I haven't read the book because (and I hope Julie would understand and support my decision), my bookshelves are comfortably full. So thanks to the Amazon reviewer who briefly outlined Morgenstern's five-step organization process. I found that these steps can be easily tailored to help people corral financial clutter, too:

Step 1, Sort: Take stock of your financial filing cabinet. What valuables do you have? Take an inventory -- using an oldfangled pencil and paper or a more newfangled tracking system like Quicken or even TMF Money Advisor's financial planning tool. Catalog what you own, owe, rent or otherwise count as an asset or liability.

Step 2, Purge: Get rid of extraneous stuff. This means everything from needless expenses (do you really enjoy call waiting?) to extra accounts (consider consolidating your old 401(k)s into a single self-directed IRA). If you're married, assess the costs and convenience of any separate accounts you have. Insure your cars on one policy, and see if you get a price break on homeowners or renters insurance with the same firm. Does your discount broker offer banking services? Nothing cuts down clutter more than getting fewer account statements each month. (Here's some more on what financial statements to trash and which ones to treasure.)

Step 3, Assign a Home: In household organization, things you use frequently are stored at the front of the closet. Stuff you use less often goes in the attic (or mysteriously disappears when your spouse darts over to the neighbor's garage sale). The same goes for your savings. (Except the garage sale part.) Short-term savings -- your mortgage money, babysitter, lawn care, bills and entertainment money -- should sit in the forefront of your mind and filing cabinet. Your monthly cash flow is accessed most frequently. To stay on top of inflows and outflows, have all family members put bills and receipts in one place. Now vow to reconcile your checking account at least once every two weeks.

Step 4, Containerize: Once you get rid of extraneous accounts, it's time to find the best place to "store" your money. The goal for your long-term savings is to make it grow. Your work retirement plan, and a discount brokerage account (where you can set up an IRA) are the perfect vessels for these important investments. Your short-term savings -- what you plan to spend within about five years on a new roof, new car, or even a major vacation -- should be placed in CDs or short-term bonds. Your peace-of-mind money -- for medical emergencies, car-repair emergencies, pink-slip emergencies -- should be easily accessible. But not too easily accessible. Consider a money market account with check-writing privileges.

Step 5, Equalize: Once you have the paper beast tamed and have achieved a state of chipper financial being, work a little every day to maintain your new centered status. In other words, when the bills, bank statements, receipts, and garage sale proceeds come in, see Steps 1 - 4 and lather, rinse, repeat.

The ultimate payoff is a simple, happy co-existence with our stuff. Writes Morgenstern: "When we are organized, our homes, offices, and schedules reflect and encourage who we are, what we want, and where we are going."

Wouldn't it be nice to be able to say that our finances were also a reflection of who we are, what we want, and where we are going?

Dayana Yochim recently got rid of eight pairs of shoes, countless kitchen items and an extra couch. She moves on to the hall closet this weekend. The Motley Fool's disclosure policy is refreshingly streamlined.

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