So many people that I talk to want to get a good handle on their family’s finances, but they are so intimidated by their finances that they don’t know where to start. How can they stay on top of all of their financial assets, their goals, and their debts at the same time? The overwhelming stress over personal finance can cause people to avoid even beginning to work through their concerns. The trick to managing everything is to simplify wherever you can. If you’re hoping to wrangle your finances into a more manageable form, I’ve listed below five tips for simplifying your finances.
The stress can make sense. Finances become pretty complicated over the years. You might have a 401(k) with your employer, a checking account, a savings account, an IRA (rolled from an old 401(k) with a different employer) and a couple of credit cards. Then, you get married and find that your husband has his own version of the same things. Therefore, the whole situation adds up to a lot of accounts to manage.
Consolidate your finances
There are some accounts you can’t control. The brokerage company that holds your 401(k) is chosen by your employer, and you have no input in the matter. Many other things, however, are completely in your control. Merge multiple checking accounts into one, main household account. Use one credit/debit card for all of your purchases. As a result, the fewer different accounts you have out there, the less time you will spend reconciling statements each month.
Use financial tools to track your accounts
No one wants to have to pull a bunch of different statements together to get an idea of their financial position. Fortunately, you don’t have to do that. There are multiple ways to tie all of those accounts to one tool, and some of them are free! While our family uses Quicken, one of my friends prefers to use Mint.com. The site has a cool budget tool, too.
Make automatic savings contributions
Of course you don’t need the hassle of writing a check each month to your savings account. By simply enrolling in automatic deposit you won’t have to worry about making those extra trips to the bank. Instead, your money will automatically move to your savings account on the day that you instruct it to move. No fuss; no muss!
Utilize your bank’s electronic bill payment tool
Forget the days of writing a check and mailing it to your creditors. Manual check writing is inconvenient, and the checks take too long to process. Today you can pay your bills with a click of a button or two. You can also enter payments ahead of time, and specify the date that you want them to be paid. Automating tasks is an easy step in simplifying your finances.
Finally, did you know that simplifying your finances could be good for the environment? It can be if you turn off the paper statements for your accounts. Instead, access them online. This way, you can print or save any statements you need from the appropriate website.
What ways do you simplify your finances?