9 Tips to Simplify Your Personal Finances

tips to simplify your personal finances

By now you've probably tried all the tricks in the book. You have an expense calculator, an expense tracker, a savings goal counter, and several spreadsheets that help you keep track of your finances. Your phone's calendar app beeps to remind you of payments for several different loans and credit cards.

But how is that simple?

The first rule for improving your personal finances is to gather all of your information and gain control. You need to know how much you're earning, spending, and saving. If you can't think of these numbers off the top of your head -- or quickly find the answers -- then you're making things too complicated.

Nine Key Ways To Simplify Your Personal Finances

Write Everything Down

This is the first step. Before you can move forward and cut down the many steps you take to manage your personal finances, you have to write down your income and all of your expenses. Don't be afraid to be as brutally honest as possible. You're not showing this to anyone else, after all.

Once you've gathered all the data you need, you now have a good idea of all of your financial details. It's just a matter of sorting things out for better control.

Switch to Paperless Billing

It can be very tiring, keeping track of all your bills. It's a lot of paper to deal with. Apart from being the environment-friendly option, emailed bills are safer because you won't be leaving them lying around for the wrong eyes to see.

Plus, you can easily check your expenses and upcoming payments by simply looking at your statements online.

Pay Your Bills Online

Harness the power of the Internet and pay your bills online.

A lot of banks now allow you to make payments via the Internet.

There's no need to step out of the house and get into a line at your bank or utility company just to handle your bills. Plus, you'll never have to worry about late payments, since you can send money even in the middle of the night.

It's also a lot easier to just set up a reminder and then pay your bill off immediately. When you have to set aside time to visit the bank and make your payments, you're likely to forget things and end up with late charges.

Set Up Reminders For Bills Payment

As mentioned earlier, you don't want to forget about your expected payments. A reminder on your phone should alert you to make your payment quickly and easily. Just pick one calendar app and choose a time that is best for you. The alarm should go off a few days before the deadline, ideally.

Don't ignore the alarm, though, because then it would be pointless. Pay your bills as soon as the alarm goes off. Don't put it off because chances are good that you will forget.

Use One App to Manage Your Personal Finances

Try to use only one app to manage your personal finances. The right one would allow you to sync to multiple devices. This way, you'll be able to record your expenses on the go, and then see the spreadsheet or chart chronicling your spending habits on your desktop computer.

Don't be tempted to have multiple apps handling your finances at the same time. The key here is consolidation and organization.

If you don't get everything together, you run the risk of confusing yourself. Pick one application and stick to it.

Get Rid Of Credit Cards You Don't Use

You don't really need five different credit cards. Instead, pick the ones that are truly useful, like cards that offer rebates for purchases from your favorite store. The rest can go.

This will also save you a remarkable amount of money from the annual fees.

Cash Only

This is closely related to the credit card tip above. When you use cash, it's a lot easier to keep track of the money you spend. For better or worse, a credit card deals in "imaginary" money -- at least until the bill comes in.

It's a good idea to stick to cash for most of your purchases. You'll be able to simplify your finances and see exactly where your money goes.

Get Organized

Tax season is difficult and definitely the most challenging part of your financial life.

To make things easier, keep a filing system. An accordion envelope is the easiest way to keep everything in one place but still segregate them accordingly. Sort through these documents before you start working on your tax report.

Consolidate Your Investments

Though it's true that you have to be pragmatic and not put all your eggs in one basket, you can consolidate like investments to make things simpler. For example, your old work 401k account can be transferred to your new retirement plan. It's better than keeping separate investment accounts for retirement, and will definitely help simplify your financial life.


    • DC @ Young Adult Money

      DC @ Young Adult Money 09/06/2013 7:07 a.m. #

      Hi Sicorra - I actually disagree with the suggestion to pay with cash as often as possible. I don't think it makes it easier to know where you are spending your money. If you put it on a credit card it's much easier to populate a monthly expense spreadsheet versus cash where you either need to keep the receipt or write down how much you spent, where, what day, etc. I would recommend people use credit cards whenever possible if your goal is to simplify record keeping. If someone is anti-credit cards I would say use a debit card, but even then you are missing out on rewards so I'd stick with a credit card if you are going to use plastic.

      • Sicorra

        Sicorra 09/07/2013 11:16 a.m. #

        I understand your point, and there are definitely people that can manage their money well using plastic.

        But the point about using cash only is that once it is gone for the month it is gone. So for example if a person allocates $400 cash to groceries each month and by the 15th that cash is gone, then it is gone.

        Whereas if they use plastic they can always tell themselves that they can spend more to get them through the end of the month and then pay it off whenever. Eventually whenever, adds up.

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 09/06/2013 11:02 a.m. #

      Online banking has been such a huge help. It really helps make bill-paying more organized and efficient for me. Plus, if you aren't comfortable setting up automatic payments, you can set up some sort of alarm on your computer so you pay bills on time an don't occur any late fees. It does take work to set everything up from a tracking/budget standpoint, but once you do - it's pretty easy to maintain and well worth the effort to see where your money is going.

      • Sicorra

        Sicorra 09/07/2013 11:18 a.m. #

        Online banking is so nice, I agree. When I think about how my father has to go to the bank and stand in line every time he wants to pay a bill, online banking is a huge time saver and very convenient.

    • Tara @ Streets Ahead Living

      Tara @ Streets Ahead Living 09/06/2013 12:42 p.m. #

      I use Google Calendar so I stay on top of when bills are due. Then reminders pop up on my phone so I know when I gotta pay the bill. I generally pay on each paycheck to stay ahead.

      • Sicorra

        Sicorra 09/07/2013 11:23 a.m. #

        Sounds good Tara! Whatever works out best to keep you on top of things.

    • krantcents

      krantcents 09/06/2013 5:10 p.m. #

      I do everything except "cash only." For me, cash is easier to spend than using my credit card.

      • Sicorra

        Sicorra 09/07/2013 11:24 a.m. #

        For some people that is the best way to handle their money.

    • Nicole, GirlRatesWorld.com

      Nicole, GirlRatesWorld.com 09/07/2013 9:10 p.m. #

      Sicorra, great post! You know. I used to struggle with late bill payments a lot! I would forget to pay, misplace bill stubs and end up lost with bills and junk mail. Switching to paperless, auto-bill pay was a godsend. It's the best thing I could do to tighten up my financial health. I'm saving a ton on past due fees too! Thanks for sharing,


      • Sicorra

        Sicorra 09/11/2013 12:13 p.m. #

        Managing all that paper and filing and staying on track with payments can be a real pain. Good to hear that you find it much easier with auto-pay and are able to stay on top of your bills now.

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