10 Ways to Simplify Your Finances

Simplify Your FinancesWith only 24 hours in a day, it can sometimes get difficult to remember all of you professional, personal, family, and financial obligations on a regular basis.

Sure, you can set up a certain time of the week, like Friday night or Sunday afternoon to take care of your bills and other financial obligations, but how many times does something come up where you end up not having that designated time available?

Holidays, social activities, and life have a way of interrupting our planned schedule.

Information overload does exist, and many Americans do suffer from it. The more bills, credit cards, and financial accounts you have, the more time you have to spend keeping track of them.

Organize, Consolidate, and Eliminate

Three ways of simplifying any task you have to deal with are: organizing, consolidating, and eliminating. The more you can organize, consolidate, and eliminate personal finance obligations, the easier it will become to reach your goals.

10 Ways to Simplify Your Finances

Below are 10 simple ways to cut down on the amount of time you spend on your finances and make your personal finances easier to control.

1. Organize your finances. Gather up all of the odds and ends, such as previous year’s tax returns, banks statements, etc. and set up a filing system. It can be very simple. Even if you put every financial document in one folder, that would be better than having them scattered in 10 different places when you need to find them.

Certainly, all related information can be stored together, such as all of your tax filing information for multiple years. As part of this, collect and safeguard your essential financial paperwork, such as insurance policies, car titles, etc. That way, you can find it when you need it.

2. Purge what you can. Many people, myself included, have an aversion to throwing out any financial related documents. But when you can get copies of canceled checks online, do you really need 10 years of paper copies in a shoe box somewhere? I am not sure what I would need a four year old check made out to Walmart for anyway.

3. Create a spending plan. Even if you are keeping good track of your finances and bills, starting and creating a budget and following it can make it easier to control your spending and improve your finances.

4. Pay cash only for daily expenditures. When you go cash only there is nothing to track here except for your ATM or teller withdrawals. Do it once a week and you have eliminated keeping track of many transactions throughout the week.

Even if you are married or share an account with a significant other, withdrawing enough cash for both of you once a week reduces the transaction to one instead of two people making “many small ones” throughout the week put on a debit or credit card. You don’t have to wait for a check to clear, or for your credit card statement to arrive.

Obviously, you will not send cash in the mail to pay bills, but for your daily spending and most retail transactions, including grocery shopping, it can simplify your expenditures.

5. Use automatic bill payments. Some people are hesitant to put large monthly bills, except maybe a mortgage, on automatic payment because they are afraid they may forget about it and accidentally overdraft their account.

If you have a few smaller monthly bills, such as water, natural gas, or other utilities, starting paying them with automatic bill payments can keep reduce the amount of bills you have to deal with every month. Start small with just a few at a time. This is what I am doing, and have encountered no snags so far.

6. Close old or unused bank accounts. Still have an old savings or checking account at Bank XYZ with only $15 in it? Close it and forget about it.

7. Automate your savings. Set automatic withdrawals for your short-term savings, such as building an emergency fund, as well as any mid-range goals you might have, like buying a new car or house in a few years, the same way you do with your retirement savings to your 401k and/or Roth IRA.

8. Use only one credit card for any expenses. If you do use credit cards, use only the one that “pays you the most back” with cash back or rewards. Don’t use the others regularly. If you are carrying a balance on some of the others, pay them off and stop using them.

9. Bundle your services. Do you have three separate bills for phone, cable or satellite, and internet service? Almost all of them now offer bundled services, frequently at a discount, for all three services. If you bundle all three, you have just eliminated two bills from your life.

10. Consolidate retirement accounts. Do you have three separate 401k accounts from previous employers? Roll them all into a single IRA account to reduce the paperwork and allow for easier control of your investments. An added bonus is that you are no longer limited to the investments offered in your employer’s 401k plan(s); now you can choose the right brokerage and investments for your financial goals.

For more great content from RC visit Think Your Way to Wealth, a “site started to help [you] make smarter money decisions in order to eliminate debt and increase wealth.”

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Last Edited: February 8, 2012 @ 1:50 amThe content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.

Comments

  1. Agree with the post above. In my case, I used “envelop budget system” to allocate funds for each expenses. This work well so far.

  2. Debt Settlement says:

    These are all great ways to organize your finances. Great post.