More than three in four Americans admit they feel anxious about their financial situation. Managing your finances is not always easy. It takes time to get organized and hold yourself accountable. But the end result is often well worth it. Have you ever thought about how you might simplify your finances?
There are many easy ways to simplify the process of managing your money, tracking your spending, and paying bills each month. So if you’re overwhelmed or feel like your finances are all over the place sometimes, these tips below can help you get back on track.
1. Block Out Time to Go Over Your Budget Each Month
It’s important to start your month off on the right foot by blocking out time to go over your budget in detail. Call it a budget meeting or anything you want. Just make sure you set a date and allow at least 30 minutes to look at your budget, set goals, and plan your spending.
If you’re married or in a serious relationship, involve your partner as well and sit down together. Map out each of your pay days, which bills are due, and what you plan to do with any leftover money. As the popular saying goes: fail to plan, plan to fail.
My husband and I like to use a combination of a planner and spreadsheet to go over our finances for the month. If you don’t go over your budget each month, you will likely spend more time each day checking your accounts and asking yourself if you have enough money for certain things.
2. Use a Budgeting Tool To Track Spending
Going over your budget at the beginning of the month is great, but you also need to follow up by tracking your spending during the month. Thanks to modern technology, you can do this automatically using a number of different apps and tools.
Mint is one of the most common tools that can help you track your spending. However, other apps like Personal Capital and YNAB are also great options. Usually, you can securely connect your checking account so the app can track and categorize your spending each month. This can help you determine if you’re staying on track with your budget categories and help bring attention to any areas where you may be overspending in.
Life can get busy especially during the week and you may not have time to log into your bank and review every transaction so it’s great to have something working on autopilot for you.
3. Automate Your Savings and Pay Yourself First
Paying yourself first is one of the best ways to simplify your finances and get ahead in general. You don’t want to stress out about not saving enough or not having enough to save. So instead, choose an amount you want to put aside each month then set up automatic transfers from your checking account to your savings account.
Paying yourself first means you transfer money to savings as soon as you get paid. Then, you can pay bills and budget with whatever is left from your paycheck. If you already have a 401(k) plan through work, the concept is very similar. The money for your retirement is taken out first thing before you even see it. As a result, it’s probably so easy to save for retirement with a 401(k) plan. Little thought and effort goes into it on your end but you’re still getting results.
4. Use a Bill Payment Calendar
Bills seem to pop up at the worst times, right? While I like to set up automatic payments for many of my bills, there have been times where things have fallen through the cracks.
Last year, my husband and I both thought the other person paid a bill so it actually went unpaid. We were charged a late fee which is not fun. Afterward, I decided to start using a bills calendar. A bill calendar can help simplify your finances if you use it to map out when everything is due for the month. We keep our bill calendar on the fridge and check it weekly to prepare for upcoming payments.
Each bill is crossed off as it’s paid so at the end of the month, we know everything is taken care of.
5. Streamline Your Credit Cards
Juggling a ton of credit cards can make it difficult to simplify your finances. First off, don’t feel that you need to have a ton of credit cards in the first place. You can still earn rewards and cash back with one or two cards.
If you are happy with multiple cards, organize all your card details in a spreadsheet so you know:
- What your limit is
- Your minimum payment due date
- The type of rewards you can earn or plan to earn
- Your account number
- When rewards expire (if this applies)
Credit cards can be very expensive and damaging to your finances if you incur lots of interest charges and late fees. Keeping a detailed spreadsheet will consolidate all your information in one place. Plus, you can also set up automatic payments each month to avoid costly credit card late fees.
Summary: Simplify Your Finances With These Tips
These 5 ways to simplify your finances are great starting points to help you improve your financial situation. There is always time to manage your money and prepare for the future when you take the time to set up automations and systems that will win back more of your time.
It’s also great to know that your overall money mindset can improve as well. When you view money as ‘easy’ it becomes easier to make ends meet and get ahead.