I have an MBA from Harvard, and I worked for 15 years in finance. So I know all about the importance of avoiding financial clutter—but I recently got smacked in the head by it anyway. My husband and I live in the Southwest, the site of several wildfires last summer. As homes burned to the ground, it dawned on me that I wasn’t sure what our expensive homeowners’ insurance covered. When I pulled out the policy statement, I discovered that it was 30 pages of all-but-indecipherable insurance lingo. Plowing through it left me feeling overwhelmed and worried. Now I had information about what my insurance covered, but I didn’t have understanding. That 30-page policy felt like clutter, because even though I could put my hands on the paperwork, I still didn’t know if I had what I needed to protect my family.
As my experience shows, financial clutter can reach far beyond not knowing where you’ve stashed important documents. Rather than a messy pile of papers, it’s a mental state that stems from the panic we all feel when the complexity of the modern financial world intersects with the unknown—i.e., with risk. The emotional form of financial clutter is very common, and while it’s true that the Internet has delivered an abundance of personal-finance information into our lives, the reality is that our collective financial sanity, security and serenity are at an all-time low. I frequently travel around the country talking to women about money, and I hear it over and over. We all need financial clarity in order to protect our families and our futures—but many of us feel unsure how to achieve it.
MANISHA THAKOR has written two books about personal finance. She blogs at manishathakor.com/blog.
Related: 16 Tips for a More Organized Home
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