I was talking with some of my friends regarding their finances. They are currently using the Snowball Method to pay off debt, working on a budget and building up an emergency fund.
As we were talking they started to discuss some of the processes surrounding their strategy. Although they are well on their way to improving their overall financial position, there were times when they would get frustrated. And feel down like they weren’t making any progress. Frustrated with managing multiple accounts, consistently saving money, or sometimes just the whole process of paying the bills.
Regardless of what strategy or method you use to save money and pay off debt, defining a strategy is one thing, actually implementing it can be another. Do you often feel like…
- You’re always thinking about your finances?
- Do you feel like you’re always budgeting, paying a bill, trying to figure out how much to save?
- Does it feel like you spend the whole month stressing about your money?
If so, you’re not alone. Improving your financial situation takes time, focus and consistency. Sometimes it can seem daunting – the proverbial two steps forward, one step back.
Out of Sight Out of Mind
If you feel like you’re constantly working on your finances, then it may be time to take a different approach. Being able to work toward your financial goals with the least amount of effort is what I call “creating the perfect financial storm”. The perfect financial storm is when you simplify and declutter your finances and make your processes so easy they no longer create stress or anxiety in your life.
Here are three ways to simplify and declutter your finances, minimize your workload, and achieve success.
#1 Declutter Your Finances
Every checking, savings, loan and credit card account generates some form of information, either in paper or electronic form. Reviewing, storing and managing multiple forms of information arriving at different times of the month can not only be a challenge but a nuisance.
To better manage and declutter your finances, consider minimizing the number of accounts you have.
- One savings account
- One checking account
- One credit card account. (after all your paying these off anyway)
In addition, if you also bank at more than one financial institution, consider reducing the number of institutions to just one. Then take it one step further and minimize the delivery method from which you receive the information from those accounts.
Most financial institutions have an online method of receiving your statements. Eliminate the hard-copies and move to electronic delivery – have them delivered via email. Then use your email application as your document “file cabinet” for when you need to review your statements.
In addition, be sure you tell your financial institution you’re not interested in any of their marketing material. Most institutions have a method of allowing you to “opt out” of these forms of communication. Check with them to see if you can limit the information they send you either via email or carrier.
If you can minimize the number of accounts you manage and then limit the information you receive from these accounts, then you’re a step closer to decluttering your finances. Less clutter means less stress.
- How Many Credit Cards Should You Have?
- What’s Not Important When Paying Off Debt
- Ways To Save Cash – Simple Lifestyle Habits That Actually Work
- Debt Management Planning and Lower Back Pain, Debt Management is Stress Management
- The Art of Being a Cheapskate – How I Successfully Manage My Budget
- 10 Successful Money Management Tips to Live By – from a 52-Year-Old
#2 Pay Your Bills Once a Month
How many times do you pay your bills during the month? Do you wait until each bill is due and then write a check? Mortgage on the 5th, cable on the 15th, electric on the 20th…
If this is currently your environment then you’re spending way too much time on your bills. And creating a whole bunch of stress and anxiety each time you do it. Seriously, who wants to be reminded four, five or six times a month that they have to spend more money. Simplify your finances!
Start by paying your bills once a month.
I typically receive my bill statement electronically. Receiving my statements electronically means I know what I need to pay at the start of each month. Then I sit down once each month and write the proverbial check.
If you pay your bills online, schedule your payments accordingly based on when they are due. If you manually write checks, write the checks and if needed hold them until they need to get mailed.
Paying your bills once a month can be a bit of a mind shift, however, if you can make this change, you will only have to go through the process of paying bills once. And then not worry about them for another 30 days. This is a simple way of getting out of the day-to-day or weekly cycle of feeling like your always paying a bill.
#3 Pay Me Now, Pay Me Later – or Just Pay Me
One of the most successful ways of growing your savings account is to set up an environment where you’re savings plan is automated.
Direct deposit or payroll deduction can create that type of environment. Depositing directly into your savings account removes the decision-making process of going to the bank, or transferring money and consciously determining how much money to save.
When you set up direct deposit for your savings account, regardless of whether it’s $10, $25, $100 or even $200 per pay period you’re paying yourself first.
If you’re not using direct deposit as a strategy to save, try it. Regardless of how much you initially direct deposit into your savings account, you will be surprised at how quickly you can save money and not even think about it.
Simplify Your Finances for Success
From an FTP perspective: strategies for getting out of debt and saving money are only as effective as the procedures used to implement them. The more complex the process the less likely they are to succeed. From this viewpoint, less is more. Re-think your processes, simplify and declutter your finances and create your perfect financial storm.
- Credit Sesame – Free Credit Monitoring and Scoring
- Ebates Cash Back Program
- 10% Happier, by Dan Harris ABC News
How Do You Simplify and Declutter Your Finance? Comment Below.