Want financial freedom in 2025? Start by decluttering—not just your home, but also your finances!
Most people believe that financial freedom is about earning more, but the real secret? Needing less. What if the key to wealth isn’t making more money but spending less on things that don’t truly matter?
Research shows that 11.2% of consumer spending goes toward non-essential items—things we don’t need and that don’t make us happier. That’s money that could be invested, saved, or used to buy real freedom. If you want to be financially free, The beginning of the year is the perfect time to simplify and take control of your spending and start the year on the best financial foot.
The Hidden Cost of Too Much Stuff
The average American home contains over 300,000 items. If each of those items cost just a dollar, that’s $300,000 spent on stuff! Now, imagine if we invested even half of that money instead. We’d have financial freedom decades sooner.
This spending habit isn’t just about money—it’s about emotional clutter, stress, and lost opportunities. We work harder to buy bigger houses, only to fill them with more things. We spend money on subscriptions we barely use, clothes we never wear, and gadgets that collect dust.
I had a client, Clarisse, who was constantly stressed about money despite earning a six-figure salary. She had two storage units filled with things she never used—costing her over $3,600 a year! She also subscribed to six different streaming services but only regularly watched one. Once she started decluttering her finances, she canceled unnecessary subscriptions, eliminated her storage units, and redirected $500 a month into savings. Within a year, she had saved enough to take a three-month sabbatical and finally start her dream business.
The lesson? Cutting the financial clutter frees up money, energy, and opportunities!
The Three Big Expenses: Where Most of Your Money Goes
If you want to truly declutter your finances, start with the big three expenses—housing, transportation, and food. These three categories make up the bulk of most people’s spending. If you can keep these fixed costs low, you’ll have much more freedom to enjoy life without feeling guilty about the occasional splurge.
1. Housing: The Ultimate Money Trap
The biggest expense for most people is housing—and unfortunately, many buy way more house than they need. The average home size in the U.S. has doubled since the 1950s, yet happiness levels haven’t increased. In fact, many homeowners feel more stressed than ever trying to keep up with mortgage payments and maintenance costs.
Downsizing or renting can be a powerful tool for financial freedom. A smaller home means lower mortgage or rent costs, lower utility bills, less maintenance, and less temptation to accumulate clutter.
2. Transportation: Is Your Car Driving Away Your Freedom?
Many people don’t realize how much they’re really spending on their car. Between car payments, insurance, gas, maintenance, and depreciation, the average cost of car ownership in the U.S. is over $10,000 per year! If you can buy a reliable used car with cash and avoid car payments, you’ll instantly free up hundreds (or thousands) of dollars a month. And if you live in a walkable area or can use public transportation, even better!
3. Food: The Sneaky Budget Killer
Eating out, grocery store impulse buys, and food waste can quickly add up. The key to decluttering your finances in this area isn’t about never enjoying a meal out—it’s about eating those leftovers and making a sensible menu plan. A simple meal-planning strategy can cut your grocery bill significantly. Cooking at home most of the time means you can guiltlessly enjoy a nice dinner out when you really want to.
Why Keeping Fixed Costs Low Creates More Freedom
Here’s the best part: when your fixed costs are low, you can actually enjoy your money more.
Think about it—if you’re spending half your income on an oversized mortgage, an expensive car, and eating out, there’s very little left over for things that truly bring you joy. You might constantly feel stressed about money, guilty about splurging, or stuck in a cycle of paycheck-to-paycheck living.
But if you keep those big three expenses low, then the occasional nice dinner, spa day, or vacation won’t break the bank. You’ll have the flexibility to spend on experiences that make life richer without financial anxiety.
This is where Your Money or Your Life by Vicki Robin comes in. She explains that most people are trading their time for money without realizing they’re losing their freedom in the process. Instead of working endlessly to afford a bigger house or fancier car, she encourages people to spend money intentionally—focusing on what truly enhances life. Financial freedom isn’t about deprivation—it’s about aligning your spending with what truly matters.
Steps to Declutter Your Finances Today
If you’re ready to stop feeling financially stuck, here’s how to start decluttering your finances today.
1. Track Your Expenses Like a Detective
You can’t declutter what you don’t see. Review your last three months of spending and highlight anything that isn’t essential and then add it up. Better yet, at this time of year you might be getting an annual summary of your spending from your credit card. If so, this makes it easy to see where you could potentially cut back. If you use one credit card for all your purchases, this makes it easy to track and eliminates the need to do a budget.
2. Cut Back on Housing, Transport & Food
Downsize or consider renting a room out instead of stretching for a mortgage.
Drive a paid-off, reliable car instead of financing a new one.
Plan meals & cook at home to cut food waste and expenses.
3. Automate Your Freedom
Make saving automatic—set up automatic transfers from checking to your investments to fund your financial freedom account. If you haven’t already got the matching employer contribution for your 401K at work, then do that ASAP. It is a fool-proof way to double your money without effort. Invest at least 10%, ideally 20% once you’ve topped up your emergency reserve account.
4. Enjoy Smart Spending
Buy memorable experiences, not more things—travel, hobbies, and quality time bring lasting joy.
Guilt-free splurges—a massage, dinner out, or a concert won’t hurt when your fixed costs are low.
5. Cut Out the Superfluous Spending that Doesn’t Bring Real Joy
A simple way to do that is to ask yourself before you buy an item, is this a real upgrade that will improve my life significantly? If so, yes, but if you are just buying something because it’s in the January sales, think again.
Try making a 30 day list. If you want something, put it on your list. If you still want it in 30 days, and it will truly add value to your life, go ahead and buy it.
Financial Freedom Begins With Simplicity
Sometimes it is easier to reach financial freedom simply by earning more. But I’ve learned that if you spend everything you earn, you’ll never reach financial freedom. It’s really about needing less and spending smarter to maximize the enjoyment you get from every purchase. Every dollar you save and invest instead of spending on clutter moves you closer to independence.
Sarah, the client I mentioned earlier, didn’t just free up money—she freed up time, energy, and mental space. She now works part-time, takes frequent vacations, and is happier than she’s ever been.
If you want to take control of your money, decluttering your finances is the first step! Start today with my Financial Independence, Retire Early Course and get on the fast track to living the life you truly want.
Want more strategies for success? Get my book, Coach Yourself to Success, and start designing your ideal life today!
