Itâ€™s trueâ€¦taking control of your money will require more time and effort up-front than mindlessly spending yourself into a black hole of debt. But this journey is all about putting in the work now so you can sit back and reap the benefits later.
The more you simplify your financial life, the easier it is to master it!
But simplicity isnâ€™t just about choosing the option thatâ€™s easiest or takes the least amount of time. Simplicity is all about exploring your options, choosing what works best in your situation and cutting out everything else.
After all, life is crazy and hectic enough, so why make things harder than they have to be?
To help you in your journey, here are 24 tips to help you drastically simplify your financial life!
1. Focus On One Financial Goal At A Time â€“ When you spread your energy across too many financial goals, you donâ€™t make much progress on any of them. Choose your top financial priority and pour all your energy into achieving it. If your goal is to pay down debt, put all your effort toward that. If youâ€™re saving for a newer car or building an emergency fund, focus on that goal, build momentum, knock it out and then move to the next.
2. Consolidate Accounts â€“ Is it necessary to have 6 checking and 4 savings accounts? No wonder people have such trouble keeping track of their money. We have 2 checking and 2 savings accounts â€“ 1 each for personal and business. Keep it simple. Set up 1 checking account and 1 savings account.
3. Cancel Your Credit Cards â€“ If youâ€™re on the debt free journey, not only should you cancel your cards, you should fire up the grill, throw on your cards, and have a Bye-Bye BBQ! By closing those accounts, thereâ€™s less risk of identity theft, less risk of racking up debt and fewer accounts to keep tabs on.
4. Combine Finances (if married) â€“ We could debate the topic, but our feelings about money and marriage are clear. Put in the effort up-front to create one set of accounts, one set of goals and one financial life. It will improve your finances and your relationship.
5. Build An Emergency Fund â€“ Few things give you peace of mind like having a stash of cash set aside for emergencies and unexpected expenses. Ours has saved us several times. This alone can change your entire approach to your finances.
6. Shop Online â€“ Itâ€™s easier than ever to compare prices, read customer reviews and make the best buying decision possible, all without leaving your recliner. We recently signed up for Amazon Prime and, after doing the math, weâ€™re set to save a lot of money and time by doing more of our shopping online (plus, by shopping through Amazon, we earn 2% cash back using our PerkStreet card).
7. Set Up Direct Deposit â€“ If your company offers direct deposit, why not skip the extra step of driving to the bank to deposit your paycheck?
8. Go Paperless â€“ For your regular monthly bills, sign up for paperless billing and have your bills sent straight to your email. If you suffer from a bloated inbox, keep it simple by setting up a separate email account for your bills. It will save you time, make it easier to keep track, and Mother Nature will thank you! While youâ€™re at itâ€¦
9. Automate Your Bills â€“ For your regular bills â€“ car payments, utilities, etcâ€¦ -take advantage of automatic bill pay. Important Note: You should still review your bills each month to check for any sneaky hidden fees, changes in service or â€śbilling errors.â€ť
10. Create A Monthly Bills Calendar â€“ For bills you canâ€™t automate, create a calendar to remind you when each are due. Choose a time each week to review your calendar and pay any bills that are due in the coming week. That way, you can avoid pesky late fees and last-minute scrambles.
11. Track Your Spending at the Point Of Sale â€“ Any time you spend money, pull out your phone or a notebook and make note of where and how much you spent, and what you bought. The physical act of tracking your spending and writing it out will cause you to be more mindful of your spending habits and help curb your impulse-buys.
12. Input Your Actual Spending On A Weekly Basis â€“ Each week, enter your tracked expenses into your budgeting forms or budget software. When you wait until the end of the month to enter your actual expenses, the task is more daunting and more tempting to avoid.
13. Carry Cash â€“ Everyone has areas of their budget where they tend to overspend â€“ restaurants, groceries, entertainment, etcâ€¦ For these pesky areas, commit to using a cash envelope system. It can keep you from overspending and make it easier to keep track. Orâ€¦
14. Use A Virtual Cash Envelope System â€“ Admittedly, making sure you get to the bank to withdraw cash before each month begins can be a bit of a pain. If it works better for you, try using a virtual â€ścash envelopeâ€ť system.
15. Become Debt Free â€“ Imagine how much simpler your financial life would be with no payments, no monthly statements, no interest paid and no stress about debt. Becoming debt free is one of the most stress-relieving, life-simplifying things you can do. Itâ€™s completely changed our lives and thereâ€™s no going back!
16. Buy A Smaller Car â€“ We live in Texas where everything is biggerâ€¦including the vehicles. But a smaller car means less maintenance, better gas mileage and more money in your pocket. Sounds good to me! Buy a reliable used car that meets your needs and leave the big, flashy gas-guzzlers to people who donâ€™t mind being broke!
17. Sell A Car (or two, or three) â€“ Itâ€™s hard to imagine many situations where a family needs 3, 4 or even more vehicles in the driveway (itâ€™s not that uncommon). Make the jump to being a 1 car family, or at most a 2 car family, and sell the rest. Use the proceeds to pay down your debt. Plus, think of the money youâ€™ll save in car payments, gas, registration, plates, insurance, maintenance, etcâ€¦
18. Rent â€“ Owning a home is perhaps the #1 threat to financial simplicity. Examples of people who bought too much, too soon and too many are all around us. Thereâ€™s nothing wrong with buying a house, as long as youâ€™re 100% ready â€“ meaning youâ€™re debt free, have a 3-6 month emergency fund, save at least a 20% down payment, can afford a 15 year fixed rate mortgage and have room in your budget for all the added expense of owning a home.
19. Buy Less House â€“ If/when you are ready to buy, consider buying less. One of the problems with buying a home on credit is the temptation to buy more than you need. Just remember, the bigger the house, the higher the mortgage payments, insurance premiums, maintenance costs, utility bills, etcâ€¦ Plus youâ€™ll spend a ton of money buying more junk to fill the house. This was one big mistake we made when we bought our first home and it definitely cost us!
20. Insure Properly â€“ Having the right insurance equals incredible peace of mind. Auto, home (or renterâ€™s), health, term life, and long-term disability are all vital and will make sure your bases are covered when life hits you (and life will hit you)!
21. Take Inventory Of Everything You Own â€“ Making a list of every item you own can be a time-consuming exercise, but may be one of the most eye-opening things you ever do. It just might blow your mind to see how much stuff you actually have. With your mind sufficiently blown, you may catch the bug to buy less, consume less and spend less. But donâ€™t stop thereâ€¦
22. Sell Anything That Doesnâ€™t Add Value To Your Life Within The Next Month â€“ Take a look through each item on your list, and for each list ask yourself, â€śDoes this thing add any real value to my life?â€ť If the answer is â€śno,â€ť sell it, donate it or toss it. You can make some extra cash, de-clutter your life and start your journey toward simplicity.
23. Get Rid Of One Item For Every New Item You Buy â€“ Once youâ€™ve started simplifying your life, you need to maintain the simplicity. Implementing this strategy will shift your focus away from acquiring mountains of junk, help control your spending and encourage you to make the best use of things you already own.
24. Give Yourself A Pay Decrease â€“ This is the old â€śPay Yourself Firstâ€ť idea. If you have a bunch of extra money in the bank, itâ€™s easier to slack on your budget and spend frivolously. Automatically transfer a portion of your income to savings, retirement or your debt snowball. Basically, itâ€™s a way of forcing yourself to prioritize, spend smart and stick to your goals.
Now Itâ€™s Your Turn
Choose 1 or 2 of these tips and put it into action this week. Change an immediate behavior or make a plan and start taking steps toward a major goal.
If you want to simplify and master your money, you have to start by taking action!
Thank you so much for reading! Weâ€™d love to hear your thoughts about these 24 tips below, or feel free to share your own ideas and tips.
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