What happens when you hear the word ‘finances’? Do you cringe? Does it make you panic?
You aren’t alone. Personal finances are among the most overwhelming, yet important factors in your life. If you’re afraid of your finances, you’ll never get ahead, but if they’re too overwhelming, it’s hard to make heads or tails out of them.
Here’s the good news.
There are easy ways to simplify your finances so you can get organized and even get ahead!
Here we go!
1. Make Automation your BFF
Technology is a wonderful thing especially when it comes to finances. We all get busy and forget things, but technology doesn’t. Automate whatever you can.
Here are a few ideas:
- Automate transfers from your checking to your savings account each month
- Set up auto pay for your fixed bills
If you have a fixed income (salary) you know how much you have each month, so there’s no risk of overdrafts when you automate your bills. Who knows, you may even save a little money as many companies offer a small break if you set up automatic payments.
2. Use only One or Two Credit Cards
If you use credit cards to get the rewards, cut back. Find one or two that offer the best rewards and stop using the rest. This is one of the easy ways to simplify your finances.
Don’t close them because that will hurt your credit score. Just set them aside and don’t use them.
Now with only one or two reward credit cards, you won’t get confused about which card you should use for which purchases.
If that’s too much, cut down to one. Find a card that offers rewards for all purchases and then there’s no stress when you make a purchase. You know you’re always earning something back.
3. Sign up for Online Statements
Ditch the paper! It can get so overwhelming. Half the time you probably don’t even read them and they just collect dust on your desk.
Almost every creditor and financial company offer online statements.
Sign up for them and then you’ll always have the documents you need at your disposal. Download them as they become available and store them in a digital file on your computer.
Less paperwork equals less stress. We could all use some of that.
4. Get out of Debt
Debt does more than drain your paycheck – it drains your energy too. Knowing you have large bills looming over your shoulders is too much to handle on some days.
When you have so much debt that you can’t see straight, it’s hard to understand what you should pay and when. Sometimes you may even have to make choices between paying Bill A or Bill B.
Robbing Peter to pay Paul? That’s not a good feeling either.
Create a ‘get out of debt plan’ and stick to it. I like the debt snowball plan. You order your debts from lowest to highest balance and pay them off in order. Any extra money you have, put toward the first debt in line.
As you pay off one debt, move on to the next. Eventually, you’ll create a large debt snowball and be debt-free!
5. Use a Budgeting App
Tracking your expenses can feel like a full-time job if you do it manually. Again, technology pulls through for us here.
If you’re overwhelmed and short on time, a budgeting app might be the perfect tool for you.
Download a free app, like Personal Capital, and let it track your spending for you.
Many apps work with your bank account, updating your income and expenses in real-time. You’ll always know how much money you have and you won’t have to waste time or feel overwhelmed.
Using a budgeting app is a great way to stay accountable and aware. You’re less likely to mindlessly spend when you know where you stand with the click of a button on your smartphone.
6. Consolidate your Goals
Financial goals are great – everyone should have them. But there is such a thing as having too many goals.
If you spread yourself too thin, you’ll never feel like you get ahead. Then what? You’ll feel stressed, overwhelmed, and likely go on a spending spree (retail therapy anyone?).
Instead, choose one or two important goals for now. When you achieve them, then add more. Have a combination of short and long-term goals if you can, but operate in order of priority.
Recommended Post: 7 Reasons Why You Aren’t Achieving Your Goals
7. Use a Robo-Advisor
If you’re investing, don’t overwhelm yourself with all the decisions and managing it. Technology comes through for us yet again in this area.
Robo-advisors are great for investing. You answer a handful of questions about your risk tolerance and goals and they do the rest.
You set up automatic deposits and the robo-advisor invests them according to your portfolio allocation. They’ll even re-allocate your portfolio if things get out of whack.
This can happen if the market goes in a different direction or you change your contributions.
Recommended Post: 7 Steps to Invest Like a Pro
8. Take it Easy on Yourself
Don’t try to solve every personal finance issue in a day or even a few months. Take your time. Personal finances affect your entire life, so make your changes and decisions slowly and carefully.
Implement new steps one at a time. See how you adapt and how they work out for you, then implement others. This isn’t a race – everyone achieves financial freedom at different times. You do what’s right for you and it will work out for the best.
Finding easy ways to simplify your finances is easier than you thought. We all put too much stress on ourselves to be ‘perfect’ financially. No one is perfect – not even the wealthy.
It all comes down to your mindset and how you simplify your finances. Give yourself a break, let technology take over, and don’t expect to solve all your financial problems in one day.
Absolutely agree, I’m using only cash or prepaid card for online shopping, following a monthly budget!
All your tips are really helpful for who wants save!