SAVE, INVEST AND RETIRE

Take Control of Your Retirement Planning

Money Management

11 Tips for Fall Financial Checklist

by 4 Comments

laptop on the bed - fall financial checklist

Time flies. The hot summer months are over and there are only a few months left in this year. For me, early autumn is the best time of the year. The changing of leaves, the colorful local markets, the apple picking, and the comfort food.

Also, fall is a perfect time to take an inventory of finances and retirement planning goals. After spending money on summer travels and activities it is good to see what lies ahead and prepare for the following months.

Having a fall financial checklist will help you review your retirement savings, prepare your home and car for winter, get your investment portfolio in shape, and make the most of your money from the holiday season to your financial decisions.

While there are many more financial tasks to tackle, this list of 11 tips is a great way to start the final months of this year.

Here is my fall financial checklist with 11 helpful tips to improve your finances and get your home ready for winter.

Finances

1. Bump up your savings – Fall is a perfect time to look at your savings and emergency fund. It is never a bad idea to save more. If you depleted your savings, now is a good time to think about how to save more. Even $100 extra dollars a month ($1,200 a year) can make a big impact.

2. Look at your emergency fund – A solid emergency fund is helpful when financial troubles come your way. Most financial planners recommend having three to six’s months’ worth of living expenses to be tucked away.

The past two years of a global pandemic were hard on most of us. And if you have depleted your emergency fund, make it a financial goal to re-build it by the end of the year. One of the best things you can do is to make sure you have an emergency fund.

3. Check remaining FSA money – If your flexible spending account will expire by the end of this year, make sure you use it. Also, check FSA policies on how much money you can carry over to next year.

4. Review your retirement savings plan – Saving money in retirement accounts such as 401(k), IRA, Roth 401(k), and Roth IRA is smart way to enjoy some tax advantages and save for retirement.

But do you know if you are on track to meet your financial goals? Look at your retirement savings and see what can be done to save more. If your employment status has changed from employed to self-employed do not forget to enroll in self-employed retirement accounts SEP-IRA and maximize your contributions if you can.

Also, if you have recently changed the employer, decide if you want to roll over any old 401(k) funds from a previous employer to a new one. Additionally, try to increase your annual contribution to retirement accounts. Even a one percent increase every year will help you save more by the time you are retired.

5. Review your investments – Look at your investment portfolio. Things change all the time in the finance world. And it was no different in the last 12 months when the stock market was shifting during the global pandemic.

It is important to look at your portfolio and review where your investments are. Hence, fall is the best time to look at your investment portfolio and evaluate it. If you are 5 to 7 years away from retirement, make sure that you are not carrying too much risk or wasting your money on investments that are not generating a decent rate of return.

Also, make sure that your current portfolio meets your investment goals. If the market caused a shift in your portfolio, it needs to be corrected to maintain the diversification you originally planned.

6. Look at your company work benefits – During the fall many companies (including mine) send out enrollment information for the coming year’s benefits. Most companies’ work benefits start on January 1. Make sure you take some time to go through your current documents and understand any changes.

I always check the changes for my company benefits like FSA, 401(k), Roth 401(k), and health insurance. Keep in mind that even though your benefit choices worked for you this year, it does not mean they will next year. You can increase your contributions to retirement accounts and increase or reduce FSA funds. Finally, do not forget to submit the paperwork for a company-sponsored gym membership if it expires by the end of the year.

Moreover, you have to make sure that you have signed up for the proper health insurance plan for you and your family. Your health may have changed over the last year or your company will be changing the health insurance providers. It is important to keep an eye on these changes because you do not want to miss out on valuable insurance benefits.

7. Look at your retirement goals – If you are close to retirement, fall is an ideal time to start planning how you and your spouse will time your retirement. You may be already discussing when you should start claiming your hard-earned Social Security Benefits, when and how to enroll in Medicare program, and if you need to buy long-term care or life insurance.

8. Budget for the holiday season – The holiday season can be expensive with Halloween, Thanksgiving, Christmas, and New Year holidays coming up. We are not surprised anymore that many stores started putting up their Christmas displays in October. That is why fall is a perfect time to start budgeting for holiday spending.

calendar - fall financial checklist

If you start early and prepare your holiday budget ahead of time, it will help you save a lot of money by controlling your spending. Make a list of all your projected holiday expenses and start saving towards your goal. How much do you plan on spending on costumes, gifts, travel, activities, and entertainment? Putting aside even $50 or $100 each week will help you prepare for holiday spending.

Additionally, keep an eye for online sales and specials so you can get your gifts at more affordable prices. And if you are a creative person, start working on DIY gifts.

Home

9. Prepare your home for winter – Fall is a perfect time to prepare your home for winter. You can cut down on future bills knowing that your home is warm and functional during the cold months.

Usually, I like to go through my to-do list for home maintenance:

  • Check the boiler and service it if needed.
  • Call the cleaning company and sweep the chimney if needed.
  • Check the thermostat and readjust the temperature.
  • Check windows for drafts and cracks and remove A/C units.
  • Check the doors for drafts.
  • Clean out gutters after all leaves have fallen.
  • Remove the outdoor hose and turn off the water supply.
  • Collect fallen leaves, trim overgrown bushes, and plants.

10. Clean up your closet – Fall is a lovely time of the year when we are transitioning from summer to winter and getting ready for short days and cold weather. Also, it is my favorite time of the year to go through my closets.

Typically, I like to pull out all my winter clothes, scarves, gloves, and coats and sort them out. It is easy to sell the items you no longer need or use on sites like Craigslist or eBay. But I prefer to donate my fall and winter clothes that I did not wear last year. Also, I look at my summer stash and decide if I will be wearing it next year. If not, I will donate or toss it. Going through my closets help to see my options for mixing and matching clothes I already have instead of spending money on shopping for new outfits.

11. Get your car ready – Take a few steps to get your car ready before winter comes because with the change in seasons comes changes in driving conditions. We live in Massachusetts, where fall is the time of the year when the temperature drops at night, and we can see an increase in rain and even ice on the roads.

road covered with fall leaves - 11 tips for fall checklist

Here are fall car maintenance tips to keep you safe on the road:

  • Check and replace wiper blades if needed.
  • Check and change fluids in your car.
  • Check your car tires.

Also, don’t forget to clean the interior of your car and empty the trunk from the summer beach chairs and umbrellas.

In case you are looking for more fall financial tasks:

  • Plan for next year’s summer vacation and start saving money in your travel account.
  • Plan for future savings – lower your food bill, cut the cable TV.
  • Update your estate plan.
  • Check rates to reduce your payment for a home and car insurance.
  • Refinance your mortgage.
  • Make sure you have a financial and medical power of attorney in place and updated.

What is on your fall financial to-do list? Do you have other fall financial tips to share?

Related Content:

Like this article? Share it if it helped you!

5 Biggest Expenses in Retirement and How to Reduce Them

by Leave a Comment

couple by the door - biggest expenses in retirement

Many future retirees expect to be spending less than they were spending before retirement. But according to the latest Consumer Survey from the U.S. Bureau of Labor Statistics the average retiree household spends around $50,200 per year (or $4,183 per month), while the average household spending is $63,036 (or $5,253 per month).

Although some expenses such as costs of commute, business clothes and lunches, insurance, payroll taxes (if you are not working) will go down or disappear in retirement, many others will go up.

Here is a look at the list of the 5 biggest expenses in retirement and some tips on how to reduce them.

1). Housing Expenses

The cost of housing is the biggest financial burden we face. We all should remember about a long list of expenses as part of owning a home:

  • Monthly mortgage payments of principal and interest
  • Real estate taxes
  • Homeowner’s insurance
  • Utilities, including electricity, heat/gas, cable, wireless, etc.
  • Water and sewage
  • Trash and garbage collection
  • Regular ongoing maintenance
  • Repairs and maintenance
  • Renovation or improvement projects

The cost of homeownership for the average American household is $13,153 annually without the cost of a mortgage. I have calculated that Roman and I spend $28,400 a year on a mortgage, insurance, taxes, utilities, and maintenance. These costs take 25 percent out of our annual budget without the cost of home improvements or major repairs.

The good news is that there are many ways you can reduce the cost of ownership in retirement:

Pay off your mortgage. One of the smartest things you can do is to pay off your mortgage before you retire. A mortgage-free retirement is usually best because you can spend more money on the fun stuff. Retirees often have to withdraw money from their retirement funds to cover their mortgage payments. Unfortunately, those withdrawals typically trigger more taxes. That is why it is better to pay down your mortgage while you are still working, so you can keep your housing expenses low.

However, for many people paying off the house is not financially possible. When a payoff is not feasible, you should reduce mortgage debt by refinancing it. With mortgage interest rates at all-times low in 2021, I highly recommend to refinance your mortgage ASAP. We refinanced our mortgage in February with AmeriSave Mortgage Corporation at 2.5 percent and saving about $500 a month. Overall, refinancing will help to lower your monthly payments and ease the financial burden on your retirement income when you stop working.

Downsize your home. If the kids are living on their own and you find yourself an empty nester living in that huge house, then it is a perfect time to downsize your home. Downsizing is one of the best ways to reduce your monthly living expenses. You can sell your home, and move to a smaller home or condo, so you can get extra cash into your pocket today.

Think about the advantages of a smaller home or condo:

  • A smaller mortgage
  • Lower property taxes
  • Reduced homeowner’s insurance premiums
  • Fewer maintenance costs
  • Less yard work, especially if you get a condo.

Take on a tenant. If your mortgage is paid off and you prefer to retire in place, you can rent out a room in your home. I understand that being a landlord is not for everyone. But if you do not want to leave your current home and neighborhood, taking on a tenant will help to reduce the expense of owning a home.

Related Content:

2). Transportation Expenses

The cost of transportation is likely to drop when you stop working. While you will not spend money on commute anymore, not all your transportation expenses will disappear. You still will have to budget for the cost of vehicles, gas, insurance, maintenance, and repairs.

desk-laptop-bag-transportation expenses in retirement

Downsize your vehicles. We all know that cars are expensive. One of the best ways to reduce the cost of transportation is to downsize your vehicles. If a large chunk of your income goes into maintaining several cars or driving luxury cars, I would suggest downsizing or choosing a different car. The savings on insurance, gas, and maintenance will significantly reduce your transportation cost in retirement.

Buy a used car. Many people choose to lease their cars because they want to have a new car every few years. Leasing works better if you are on the road for business and can deduct the lease payments. But if you are getting closer to retirement, buying a good used car, rather than a new one for the image will help you afford retirement sooner. In the end, the cost of buying should be less expensive than leasing a car in the long run.

Public transportation. Another option to consider for retirement is to move close to an urban area and take advantage of public transportation. In this scenario, you might not need a car at all. When you want to go on a road trip, simply rent a car.

Car-sharing services. Most urban cities also have car-sharing services that give you easy and affordable access to a car for temporary needs. Also, using services like Uber or Lyft can help you save money without the regular monthly costs associated with owning or leasing a car.

3). Healthcare Expenses

You can expect your medical expenses to be some of the biggest in retirement. With rising life expectancy and healthcare costs, you should expect to pay more for this budget category as you grow older.

According to recent data from Fidelity, the average out-of-pocket healthcare cost for a 65-year-old couple will be close to $285,000 instead of $265,000 as it was two years ago. And that number does not even include long-term care costs.

Many baby boomers who are close to retirement still believe in free Medicare. I assume people do not do enough research to understand that Medicare does not cover all your medical expenses. Before you retire, it is a good idea to have a clear understanding of what Medicare covers and what it does not. Knowing that will help you save hundreds of dollars.

Most people will be eligible for Medicare once they turn 65. But if you retire early, you have to find and purchase health care insurance on your own. Medicare consists of 4 parts and each part covers specific medical services. Although Medicare covers a wide range of health problems, it does not include most dental care, hearing aids, and long-term care.

There are several ways to avoid being hit by a big medical bill while living on a fixed income and do not how to pay for that:

First, you need to plan for future healthcare expenses and save more money. You can set up a health savings account (HSA) and start contributing money regularly. It is a tax-deductible account that helps to reduce your taxable income. With withdrawals from HAS, you can pay for qualified medical expenses, including dental and vision.

Next, you need to decide how to pay for long-term care if you or your partner need it. Long-term care insurance is the most recommended way of planning for future expenses. It will help you not to be a financial burden on your family if that time comes.

Lastly, do not forget to get regular check-ups, screenings and to visit your doctor, so that if any problems get caught early you can do something about them.

The best way to reduce healthcare costs is to take care of your health so you can live a long and healthy life in retirement. What you eat today and how often you exercise will impact who you are in 10 or 20 years. Being active and eating right can add more years to your life and save money on future medical bills.

Related Content:

4). Food expenses

The cost of food is rising gradually, and it has a big impact on a home budget. Roman and I spend almost $10,000 per year on food, and it does not include eating out. We used to spend $100 to $150 for a nice dinner in Boston once a month. If you add buying lunches for the two of us twice a week, it will add another $40 to $60 per week. Overall, we would spend almost $5,000 on just eating out.

Since the covid pandemic, we stopped spending money on restaurant meals and take-out lunches. Instead, I buy groceries at Whole Food or Wilson Farm stores and cook homemade meals. This way I know that we eat great and healthy food. And our last year’s budget showed that our decision to cut on eating out saved us a lot of money.

It is not that you should never eat out. But if you are retired and worried about covering your daily expenses, reducing the number of times you dine out at a restaurant can help to reduce the cost of it.

However, one of the best ways to save money on food is cooking and eating at home.

5). Travel expenses

For many baby boomers traveling is the number one goal on their retirement bucket list. After all, most people want to explore the world when they have so much time on their hands.

But traveling is expensive. You have to spend money on accommodations, air tickets, restaurant meals, rental cars, entertainment, tours, and more. While you are working you are limited to a few weeks of vacation. But when you retire you are more flexible with your time of travel.

city road decorated - travel expenses in retirement

To reduce the costs of travel you can take advantage of last-minute bargains, travel at an off-peak season, use senior discounts, and slow the pace of your travel. However, if you are anything like me and my husband, you can expect the travel budget only to grow in retirement.

Eventually, I would expect our travel cost to drop off when we are in our 80s or 90s. But I would expect the decades of amazing and memorable trips until we are too old to travel.

Related Content:

Final Thoughts

As I said before, your expenses are likely to decline with age because most people don’t need as much as they grow older. In the early years of retirement, you will be relocating, traveling, and maybe spending more on luxuries you missed to enjoy when you were busy working.

But later in retirement, you are more likely to be settled in your lifestyle. You are less likely to be actively spending in your 80s or 90s. Your life will become simpler and more limited with changing your energy levels and health.

While no one can see into the future, we all still need to do a good job of predicting and probably reducing our expenses by planning ahead of time. In the end, it is critical to get your big expenses under control before you retire so you can account for them in your retirement budget. After all, you do not want to run out of money fast so you have to start looking for a job in your 80s.

Are you planning to reduce your expenses? Share your comments and ideas with us.

Do not forget to share this article if it helped you!

20 Easy Ways to Save Money Every Day

by Leave a Comment

people-meeting at table-easy ways to save money

We all know it is easier to spend money than to save them. Spending money often gives us emotional comfort and became a habit. But changing your spending habits and finding new ways to save money can be a great thing for your financial life.

Learning how to save money can help you to reach your financial goals:

  • to buy a house
  • to pay off debt
  • to save for a vacation
  • put more money in your emergency fund
  • to save for retirement
  • to save for kid’s education

No matter what your financial goals are, this post has money-saving ideas for everyone. Start with a few of these suggestions and see if they work for you.

Here are 20 of my favorite ways to save money every day:

How to Save Money Through Money Management:

1). Pay your bills online.

There are many benefits of paying your bills online. I personally do not remember the last time I mailed off a check to pay our bills. By going online, you will not be using envelopes, stamps, and checks as much as it was popular in the past. Automation helps to save money and time and reduce the stress of money management.

We pay all our bills automatically. Our online payment is set up with a local bank and bills are paid out of our checking account. I just have to make sure I added money to that account before the bills are due. Even though I keep an eye on all our transactions, but I never have to worry about being late on bill payments.

Related Post: 9 Ways to Organize and Simplify Your Finances

2). Consolidate your credit cards debt.

Debt can be a very terrifying issue. When you face thousands of dollars in credit cards debt you do not have enough money to save for retirement or to pay off your mortgage more quickly.

You can save a lot of money and reduce your monthly payments by consolidating your credit cards debt. If you own several credit cards try to consolidate your debt into a single credit card with a lower percentage rate. It will help to reduce interest costs and make your monthly payments more manageable.

table-paper - easy ways to save money

One of the best ways to consolidate your debt:

  • Refinance with a balance transfer credit card
  • Consolidate it with a personal loan

3). Get cash back when you shop online.

For many of us, it has become so convenient to shop online regularly. That is why we need to turn it to our advantage and learn how to get paid while shopping online. You can sign up for websites like Ebates, Ibotta, Rakuten, and Swagbucks to take advantage of cash-back rewards. All these websites are free to join and easy to use.

If you want to learn how to earn cash back, save money on groceries and travel, I recommend reading the article by Michelle from Making Sense of Cents:

Best Rewards Credit Cards for 2021 – What You Need to Know

4). Negotiate credit card rates.

If you are losing money by paying a lot of interest on your credit cards you should negotiate your current interest rate with your credit card company. It is important to remember that you have some power to negotiate your current interest rate as long as you have been making payments regularly. Call your credit card company and ask for an interest rate reduction.

5). Transfer your credit card balance.

If you cannot reduce your credit card interest rate, try to transfer your credit card balances to 0 percent APR card. Transferring your balances will help you save hundreds of dollars in interest over time.

The Best Zero Percent Interest Credit Cards

6). Move your money into a high-yield savings account.

Most people have their savings stashed in a local bank with a very low-interest rate. The primary reason for that is because it is convenient and close to their homes. Unfortunately, your money will not grow fast over time with low-interest rates.

You can do a lot better by moving your money into a high-yield savings account. Find online banks that are paying interest rates higher than your bank and keep your savings there.

Check out the Best High-Yield Savings Accounts and start earning higher interest right now.

7). Refinance your mortgage

You can save a lot of money by refinancing your mortgage to a lower interest rate. With a lower interest rate, you can get lower monthly payments. And once you reach 20 percent equity you can eliminate PMI – private mortgage insurance.

Refinance rates from Wells Fargo

How to Save Money Shopping:

The next time you are going shopping make sure to apply these money-saving ideas:

8). Stick to your shopping list.

One of the easiest ways to save money is to stick to your shopping list. Do not go shopping if you do not have a shopping list. Creating a list is a great way to make sure you will purchase only what you need. Otherwise, you might go on impulse shopping and spend more money than you have planned.

Stay away from email marketing and do not subscribe to emails from your favorite retail stores. Avoid the chances of spending more money on things you do not need.

9). Stop going to the Mall.

Retail marketing is all around us and it is hard to fight the temptation to shop for new clothes. That is why if you want to save money you should stop going clothes shopping so often. As I said before you should have a plan and shop only for what you need. And stick to your shopping list!

10). Do holiday shopping right after the holidays.

One of the best ways to save money on shopping is to do your holiday shopping after the holidays. After the holidays, the prices go down drastically, sometimes up to 75 percent lower. I often buy party supplies, decorations, wrapping paper, and even gifts a few days after the holiday passes.

11). Clean your closets.

If you have an urge to buy new clothes often, I recommend going through all your closets and see what you might find. Make an inventory of your clothes. Have a yard sale or use craigslist to sell clothes buried in your closet for years.

Another useful trick is to take the clothes from the back of your closet and bring them to the front. After cleaning your closets, you might find your wardrobe looks completely different and you do not need to spend money on clothes right now.

How to Save Money on Food:

Learning how to save money on food and groceries does not have to be complicated.

12). You can save money on food by:

  • Prepare some meals at home
  • Cook from scratch
  • Get a crockpot
  • Brown bag your lunch
  • Invite friends over instead of going out
  • Share meals when eating out

13). You can save more money on groceries if you choose to:

  • Skip the bottled water and soda
  • Buy in-season groceries
  • Plan your meals around your grocery store’s sale
  • Start a vegetable garden

How to Save Money on Entertainment and Vacations:

If you are planning a road trip or vacation, there are lots of money-saving ideas. Here are a few of my favorite ones:

14). Check out free events in town.

Our town has several wonderful parks, lakes, trails, free tennis courts, and more. Everyone can have fun playing outdoors, hiking on trails, walking around the lakes, or trying any sports activities. And it is all there for free.

Most towns schedule many free events. You can save a lot of money if you want to get free entertainment and free food. What you need to do is just look at your community calendar. Stop by the local town hall or library and ask how to get a list of upcoming community events. I always check out our town’s website to keep in touch with what is going on around us.

15). Pack food for road trips.

If you want to get out of town, take some time to pack meals and snacks for your road trip. Thus, instead of stopping in the middle of the trip and driving around looking for a place to eat, you can just eat on a road. Even better if you can stop at a nice park and have a picnic there. This way you will have fun and save money. Travel service plazas and fast-food chains are conveniently located right off the highways and always expensive, so you better off avoiding them if possible.

16). Use Airbnb when traveling.

For the past decade, Airbnb became hugely popular among travelers as a cheaper alternative to hotels. Vacations are always expensive. The next time you plan on taking a trip, check out to see and compare prices for Airbnb vs hotels. You can save a lot of money by renting an entire house to yourself for a fraction of the hotel cost.

Stay at Airbnb

17). Use Booking.com for travel deals.

Booking.com is one of the best websites in the online booking world.

city of Rome - save money on travel expenses

We like to travel and use this website all the time for booking our hotels because you can find some incredible deals. If we stay at the hotel, we always try to find one with breakfast included in the price. I love hotel breakfast especially when they offer regional specialties. With breakfast included we do not need to start our day trying to find a place to eat and we can take a bagel or pastry and some fruit for our lunch later.

Use Booking.com for last-minute deals

18). Use your AAA discount.

If you are an AAA member you can save a lot of money by using your AAA discounts. AAA travel agency has money-saving offers from cruise vacation packages and hotel discounts to car rental deals. To save more money use your membership card to get a discount anywhere you can.

Use AAA for your travels

How to Save Money at Home and on Services:

There are many ways to save money at home and on services. These tips will help you minimize your household expenses significantly.

19). You can save money at home if you want to:

  • Try to fix things yourself. You can learn anything you want from YouTube.
  • Turn off the lights every time you leave the house or the room.
  • Install energy-efficient light bulbs. Swapping just your 4 or 5 most used light bulbs for LEDs can save you $50 or more a year.
  • Rent out unused space in your home.
  • Cut your lawn.
  • Look for a cheaper place to live.

20) You can save money on services if you choose to:

  • Get rid of some of your subscription services (meal deliveries, streaming services, etc.)
  • Cancel unused gym memberships.
  • Cancel the cable or satellite channels you do not watch. Switch to low-cost cable alternatives such as Netflix, Amazon Prime Video, or Hulu.
  • Get rid of your home phone and switch to cell phone plans.

Final Words

We all know that trying to find easy ways to save money can be tough. We have been there before. There are times you feel that you are not making much progress even you have tried everything. However, if you are prepared to sacrifice now and learn about the best ways to save money every day you can reach your financial goals a lot faster.

What are your favorite ways to save money? Share your thoughts and ideas with us in the comments below.

Remember to share this post if it helped you!

9 Ways to Organize and Simplify Your Finances

by 4 Comments

woman's hands - dollar bill - organize-simplify-your-finances

The modern lifestyle can be very chaotic and stressful. It is no wonder we are overwhelmed by our busy schedules, family responsibilities, and finances.

Money management can be complicated on all levels. Everything from budgeting, retirement planning, savings, investing, debt, and even types of insurance needed to be organized and managed.

I do not know about you, but I have found that often enough finances are in control of my life. I get overwhelmed with so many parts needed to be managed to keep my money goals on target.

Fortunately, there are many ways to manage money without getting overwhelmed. Learning how to organize and simplify finances eventually will help you stress less about money and focus on what is important in your life.

If you feel that your financial life is out of control, I encourage you to try one or two ways to organize and simplify your finances.

1. Organize financial paperwork.

It is hard to simplify your finances when you do not know where to find your financial papers at the last minute. And in case something happens to you does your family know where to find your important documents?

That is why the key to keeping your finances simple is to keep them organized in one place.

Collect all your bank statements, bills, legal documents, mail and set up a filing system in a way it suits you. The filing system should be simple and yet effective to keep track of your financial papers. I keep all my papers in simple manila folders and hanging file folders inside a 3-drawer file cabinet. All papers are divided into categories:

  • Expenses
  • Credit cards
  • Banking
  • Medical
  • Insurance
  • Investments
  • Tax returns
  • Miscellaneous

Once a year I go through all folders and get rid of everything I do not need anymore.

2. Track all financial accounts in one place.

It is hard to keep a track of everything you own if you do not have a system. If you want to simplify your finances, you should create a list of everything you own. Seeing all your financial information in one place will help you get a big picture.

Start the process by gathering your financial information in one place. This way you will see all your expenses, assets, debts, and liabilities at glance. Whether you want to list them down in a traditional ‘pen and paper style’ or create an Excel spreadsheet, call it “an inventory of your accounts”.

You can also do it with a personal finance app like Mint. This popular free online financial tool allows you to link all your accounts to get a real-time view of your financial life in one place. Also, this app helps you pay bills in one place, gives you updates on your payments, gets reminders on your due dates.

I personally use a combination of Mint and Excel spreadsheet and it works well for us.

MINT

3. Consolidate your accounts.

One of the easiest ways to simplify your finances is to consolidate your accounts. Many people still like to have multiple savings and checking accounts and keep money in several different banks. In addition to that, you may also have a mortgage, retirement and investment accounts, and insurance products. It is a lot to juggle.

I believe it makes your financial life is complicated. If you want to simplify your finances, you should keep your accounts to a minimum.

I even recommend closing your old accounts including your old retirement accounts. If you changed your jobs a few times, you might still have your 401(k) money with previous employers. And if you forget to roll over this money to your IRA or Roth IRA, you may even forget to track thousands of dollars invested in old retirement accounts.

Related articles:

Save yourself the headache of dealing with multiple savings and checking accounts by closing those that are not useful and consolidate them in one bank account. If you have fewer accounts to track, it means you have less hassle remembering logins, websites, and tracking your money.

4. Pay your bills automatically.

If you hate keeping old receipts and bank statements, you should take advantage of automation and go paperless. I personally do not remember the last time I mailed off a check to pay our bills.

table-globus-smartphone-organize your finances

There are many benefits of paying your bills online including convenience and security. By going online, you will not be using envelopes, stamps, and checks as much as it was popular in the past. Moreover, it will be easier to track your payments using a lot of tools like reports and alerts when you sign up with an online service. The best part of automation is to reduce the stress of money management and make it less complicated.

All our family bills are set up to be paid automatically out of our checking account. I just have to make sure I added money to that account before the bills are due. Even though I keep an eye on all our transactions, but I never have to worry about being late on bill payments.

5. Automate your savings.

Another great way to simplify your finances is to automate your savings. Learning how to automate your savings will help you stress less and save more. Every time we receive our paychecks, a lump of it automatically is going into our retirement accounts. Another portion of our income is deposited into our savings account and then the rest is going into our checking account.

We use our savings account for keeping our emergency fund money, and funds for future travels. The checking account is where we keep the money for our monthly bills and living expenses. I like to know that our income gets distributed in a few simple accounts. By automating it, I always know I am going to be saving a certain portion of our income each month.

Another great thing I like about automating our savings is that even a small amount of money will grow up over time. I started with a $50 automatic transfer from checking to savings account once a month, then increased it to twice a month. The automation really helped to raise our travel fund from $1,000 to $8,000.

6. Simplify your investments.

The simplest way to invest your money is through index funds. Index funds are low-cost and low-risk investments because they follow the market indexes. But you still have to deal with asset allocation and portfolio rebalancing.

If you are a new investor who likes hands-off investing experience, try using Robo-advisors.

I recommend checking out Betterment as a Robo-advisor.

Robo-advisors are known as online advisors or automated investing services. Robo-advisors are much cheaper than a human financial advisor. These online services make it easier for you to start working on your financial goals. You will get help with your investments at a low cost and with low account minimums.

If you want to learn more about Robo-advisors, I recommend reading What is Robo-Advisor and How Do They Work from Balance.

7. Pay down debt.

Carrying debt on a few credit cards makes your financial life stressful. When you face thousands of dollars in credit card debt you do not have enough money to save for retirement or to pay off your mortgage more quickly.

Set your financial goal to get rid of high-interest debt as quickly as possible. You can use recommended debt snowball or debt avalanche strategies to pay down your debt.

Related Post: How to Pay off Debt?

You can also reduce your monthly payments by consolidating your credit card debt. Consolidating a number of your credit card debt into a single one may be a good idea if the new debt has a lower percentage rate than your credit cards. It will help to reduce interest costs and make your monthly payments more manageable. One of the best ways to consolidate your debt:

  • Refinance with a balance transfer credit card
  • Consolidate it with a personal loan
blue credit card-debt-simplify finances

However, it will depend on your credit score and how much debt you have accumulated.

8. Package all services in one place.

Consolidating your expenses in one or two places is another way to simplify your finances and save some money.

Many companies produce and supply multiple products and services. They sell these products or services separately or in packages or bundles, at a “bundle price”. As a result, you can buy them together as a package at a lower price than what you would pay for them individually.

You can bundle together services like your internet, cable TV, and cell phone. You can also package together with all your insurance needs with one company such as homeowner and car insurance.

The best part is that you can save money by getting a discount from your provider for combining two or more services on one bill. And you can reduce the number of bills to pay each month from several to just one.

9. Reduce the number of your credit cards.

Another way to simplify your finances is to get rid of numerous credit cards.

Once, we used to have nine credit cards and it was way too complicated to keep track of our spending. We used credit cards for promotional money transfers, to earn cash back, and other rewards. At some point, it became a nightmare to pay off those balances.

Eventually, we trimmed down the number of our credit cards to just a few. We prefer to use credit cards with no annual fee and cashback rewards. And we do not worry about high interest rates because we always pay the balance off in full each month.

Best Credit Cards Comparison by Forbes

Final Words

If you want to simplify your finances, it does not have to be complicated. Just making small changes as I have described in this post can make a huge difference in your relationship with money.

Do you feel frustrated dealing with your finances? How do you simplify your finances?

Remember to share this post if it helped you!