How to Simplify Your Finances?
Many of us declutter our homes even before the new year starts or right around spring cleaning time. But, have you ever thought of decluttering your finances to simplify your financial life?
When I started this journey into minimalism, I also soon found myself decluttering one important aspect of my life—finances. Because, like many things, money is complicated.
Think of the many bills to pay, investments, savings, mortgage, taxes, etc. Finances can seem overwhelming that it is easy mismanage it, overspend or make poor money decisions.
If you feel that your financial life is out of control, I encourage you to simplify your finances and here are compelling reasons why you should do it, too.
Why Simplify Your Finances?
Get Rid of Unnecessary Bills and Expenses
It’s possible that you don’t have the best deals on car insurance premiums or you are no longer with some subscriptions, yet you still keep paying for them.
In this case, it is to your advantage to save money by trimming out the unnecessary bills and expenses. After all, it could have been money I could put to work on something else more important.
Make Better Financial Decisions
With less clutter, you’ll have better view of your finances, thus you are less prone to making poor money decisions
Make Better Use of Your Time
I’m a firm believer that “time is gold” and wasted time = wasted money. So, if I waste my time digging through a pile of receipts and records because I have been disorganized, it also means wasting precious time that could have otherwise earn me money.
I bet you’d rather spend your time on income-generating activities or to do things that matter, and having a financially decluttered life is one way to free up your time for more meaningful pursuits.
If you are looking to simplify your finances, here are simple tips to help you lighten your financial load.
Financial Decluttering Tips: 9 Ways to Simplify Your Finances
1.Gather Your Financial Information in One Place
Effective decluttering begins with identifying with what you have and what you can let go. With that said, start the process by gathering your financial information in one place – your assets, debts, expenses, bank and checking accounts, credit cards and so on.
Whether you want to list them down traditional style or create a spreadsheet, what’s important is that you see your finances’ bigger picture.
You can also do this with apps like Mint, it’s a finance tool that I really think every one should try. Mint allows you to link all your accounts to help you see a clear real-time view of your entire financial life in one place. It helps you track and pay bills in one place, get reminders on your due dates, gives you updates on what’s paid or not. You can also set financial goals and Mint will help keep track of your progress.
2. Settle Your Bills Right Away
If you’re the type of person who waits for the bills’ due date before paying, chances are, you’ll have a couple of bills piling up and it’s possible to miss or two of them at some point. There is no reason why you shouldn’t pay your bills when you can already, so don’t take wait until it’s the deadline.
Instead, right acheck right away or pay it online so it’s one thing settled and one taskcrossed off from your to-do list. Also, the earlier you settle your bills, thelesser the chances of you forgetting them and incurring late fees as aconsequence.
3.Consolidate Your Debts
Not all people think that debt consolidation is the universal answer in reducing the stresses of multiple debts, but if consolidating a number of debts into a single one makes life easier for you,why not? After all, consolidating your debts means you only have one credit or to deal with, one monthly payment to come up, and just one due date and interest rate to handle.
4. Minimize the Number of Credit Cards You Use
It’s pretty common to see people using more than four credit cards nowadays, but if you really want to keep your financial life simple, you really don’t need a lot of credit cards in your life.
Look at your credit accounts and see what you can let go, and settle for one or two that you can use for expenses, emergencies and rewards. Just remember though that closing credit accounts can impact your credit score, so just let your long-standing accounts open (even if you’re not using them) and get rid of the cards that have the least impact to your credit score.
5.Take Advantage of Automation
Surely, technology has come a long way to the point that you can automate a number of financial activities so you don’t have to worry about forgetting them. Automation is as simple as automatically setting aside a portion of your paycheck from your payroll account to your savings account, as well as paying for recurring bills from your checking account month after month. Automation is so wonderful that you can go through the motions of your day knowing that these tasks have been settled for you automatically.
6.Pay with Cash When Shopping
For quite sometime now, I have been using cash when shopping and I love how this helps me avoid impulse buying and unnecessary debt. No unnecessary debt = lesser stress!
7. Close Old Accounts
Do you have a savings account that you never use or too many accounts to keep track of? Save yourself the headache by closing those that are not really useful to you, and consolidating your finances.
For instance, you may be able to combine two different retirement accounts or close an old mutual fund that has a small amount of money in it.
8. Declutter your expenses
If you are constantly buying stuff you don’t really need or spending too much money on subscriptions you barely use, maybe it’s time to declutter your spending.
To do this, you have to know where your money goes. Start by checking out your bank/credit card statements to know what expenses you should cut out. When you stop spending or limit your spending on unnecessary things,obviously you’ll have more money for saving or for things that matter to you.
Money resources to help you declutter your finances
Trim : Let this Robot Lower Your Bills!
Trim is a virtual assistant that analyzes your financial transactions and find ways to save money.
It can help you cancel old subscriptions and negotiate bills ,too! It is 100% FREE to use and can help you lower your Internet/cable bill up to 30 percent by finding better or cheaper plans for you. All you need to do is upload your receipt and this bot will do the rest.
It currently works with cable and internet providers like Direct TV, Comcast and Verizon. Sign up for Trim for FREE here.
Digit
If you are a non-saver and want to save money without thinking about it, this could be a great finance tool for you. It’s a money app that analyzes your income and spending to find money it can safely set aside for you.
9.Go Paperless
If you hate keeping receipts or bank statements, gopaperless. You can choose to receive your bank or credit card statements all inone email or use online or software-based account aggregation tools such asMint.
Another benefit of paperless is that it takes up less spaceand also better for the environment.
Final Thoughts
Having messier finances can lead you to overspending, missing bills or neglecting debts. But once you start tidying things up and see the bigger picture clearly, it is easier to develop clearer goals for your money.
So, if you haven’t started clearing your financial life yet, I urge you take action right now.There’s no other better time than today.
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