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My theme word for 2021 is simplify. I plan to apply it to every area of my life. But I’m starting with my finances. Running your personal finances in a streamlined, simplified way is a key step on the road to eliminating financial stress and improving your financial position long-term. If that’s sounding attractive to you, here are some of the steps you could consider taking.
Eliminate What You Don’t Need
Many of us have too many financial commitments (especially when it comes to things like subscriptions and membership fees) and that’s a great place to start. But unnecessary outgoings aren’t the only thing you might want to eliminate. Many of us also have too many bank accounts, investments, credit cards, and loans. I’m looking at what I can eliminate there, too.
What you need, and can handle, will depend on your own circumstances. I’m aiming for just one checking account and a couple of savings accounts, all with the same provider and all easily managed from the same online account/banking app. I’m also aiming for just two rewards-based credit cards, and I’m going to simplify my retirement savings too.
There are pros and cons to debt consolidation, and you may want to talk to a credit counselor, if your debt profile is complicated. But many people can simplify their monthly payment schedules, and save money on interest, by consolidating some of their debts. This can be done with a consolidation loan, or sometimes by transferring credit card balances to a new interest-free card. Just make sure you’re aware of all the conditions attached, and any impact the process may have on your credit score.
Sort Out Paperwork and Go Paperless
Many of us have a lot of finance-related paperwork, much of which we no longer need. It’s time to go through that and shred what isn’t essential. Then go as paperless as possible going forward. I haven’t seen a paper bank statement or credit card statement in years, and my life is much simpler for it.
Use Technology if It Simplifies Things
It’s easy to assume technology will simplify things, but it’s not always the case. There are dozens of apps and online systems you can use to help organize your finances. Just make sure they really are making your finances simpler and not unnecessarily complicating things. An automated accounting system, such as QuickBooks, can certainly simplify things come tax season, and help you track your finances better.
One app I love is Honey, which automatically searches the web for discount codes when you shop online or search for deals on services such as insurance or utilities. I only realized recently that many people still search for discount codes through Google when using online retailers (when they remember). I’ve not needed to do that for years, thanks to Honey. And I can’t forget to check for discounts because it’s done for me, whenever the app sees I’m going through a purchase process.
Make a Budget
Yes, it takes some time upfront, but is potentially the most life-changing thing you’ll do when it comes to finances. Life really is simpler with a well thought out budget.
In many ways, I’m not a fan of automated payments as I like to check my bills before I pay them and make sure they’re accurate (mistakes do happen). However, if you have regular fixed payments that don’t vary, such as a phone plan or insurance payment, it can really simplify your life and finances to automate them. It can also save you money with some payments, as you’ll be offered a small discount for switching to autopay.
Simplifying your finances is something that makes life easier, feels satisfying, and saves time long-term. However it can also save you a little money, so it’s well worth setting aside a little time to do it.
About the Author
I’m a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a content creator for hire, helping brands and businesses tell their stories, grow their audiences, and reach their ideal customers. I’ve lived, worked and studied in six countries, across three continents. Stop by my blog TheSavvySolopreneur.net to learn how to run your own (very) small business on your own terms. You can also connect with me at my website KarenBanes.com or follow me on Medium.com.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.