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Finances can be messy! They touch every aspect of your life, but they can be so tricky to navigate. We were definitely not prepared to simplify our finances!
For most of us, adulthood came with a promotion to becoming the CFOs of our own lives – a role that school definitely did not prepare us for.
Despite getting an education an accounting I still felt unprepared for this!
We have learn to do our own taxes, deal with banking, creating budgets, taking on debt, paying off debt, learning to invest. Phew.
One way to navigate the financial mess is to find ways to simplify your finances. Keep your finances organized, and at least you’ll feel like you have some control over them.
That of course is easier said than done. So here are some tips to help you simplify your finances!
Tips to Simplify and Organize your Finances:
#1: Keep a list of ALL your accounts in one place
Having a spreadsheet, document or even a dedicated notebook with this list is helpful. It keeps everything in one place, and you know exactly what is going on with each account.
Make sure the list include all the accounts, even if they are with the same ban. And yes, include that credit card that you opened just to get a discount at the department store.
Here’s where to start making that list. List any and all of these that you own:
- checking accounts
- investment accounts
- registered accounts (TFSA, RRSPs, 401k)
- credit cards
- mortgage debt
- student loan accounts
- lines of credit
#2: Close/Cancel accounts that you do not use
Now that you have a list of these accounts, close out any accounts or credit cards you no longer need.
A word of caution with credit cards, do your research. In some cases, reducing your credit available can have a slight impact on your credit score, which could be important if you’re looking to get a loan or mortgage in the near term.
Bonus: You might even save on bank fees as a result!
#3: Review & Reduce subscriptions and recurring payments
Make a list of all the subscriptions, and unsubscribe from subscriptions you don’t use.
This list is not exhaustive, but think about any recurring payments that appear on your credit card bills. Do you need them all?
- TV / cable
- Cellphone bills
- Streaming services (Netflix, Disney, Apple TV, Spotify, Apple Music)
- Education services (Skillshare, Linked In Learning etc.)
- Software services
- Grocery / Delivery subscriptions
- Subscription boxes
- Gym memberships
- Transit passes
Having a list of all the subscriptions in one place can help you evaluate whether you still need them all. Maybe they were useful to you when you signed up, but your lifestyle has changed since then. Or the company has started to offer new plans that are better suited to you!
Having this list can help you reduce or even eliminate any services that are duplicated in your life.
#4: Automate your payments to Simplify your Finances
Can you automate your bill payments (like mortgage, utilities, cellphones)?
Have the payees simply take their share every month.
This of course would mean you’ll have to make sure that your account has sufficient funds.
However, automating charges, especially those that do not fluctuate monthly, can help simplify your finances, and reduce the time you spend on mundane tasks with your money. It’s one less thing to worry about!
#5: Automate your savings to Simplify your Finances
This step is also crucial to simplifying and working with a no-budget budget.
It’s a way of paying yourself first!
If you get a consistent paycheque, say every two weeks, you can set up a recurring transaction to move a pre-determined amount to your savings or investing account.
That way the excess funds are not sitting in your chequing account, and you’re not tempted to spend it!
#6: Eliminate the paper
I can’t believe in 2020, paper mail is still a thing. Truthfully, I hate opening my mail, and dealing with things in those envelopes.
If you’re still getting paper statements, but all they do is collect dust in a pile of other useless mail, maybe it’s time to ask your bank to just not send them!
In fact, my bank has even started charging to receive paper statements!
Most banks have digital statements available, if you need a copy, you can always download a copy and save it for yourself.
#7: Review your financial goals
If I were to ask you what your current money focus is, would you be able to tell me the #1 goal right now? It is important to set money goals, that help you achieve your overall life goals.
Of course, everyone wants to be debt free, make more money, spend less money. But you have to pick one (maybe 2) things to focus on so you can prioritize your energy on achieving those goals.
If you did set financial goals, are they still valid. Do you need to revise them?
Although this isn’t a one-size fits all solution, the primary focus should on:
- setting aside something for emergencies,
- paying down debt first (especially high interest debt like credit cards),
- working out a plan to save, and
- finally investing to build wealth.
Depending on where you are in your financial journey, pick one thing to focus on at one time, and it’ll help you achieve your goals quicker!
#8: Schedule financial reviews in your calendar
Set time aside to review your financial life – either monthly, quarterly.
Whatever frequency you pick for your lifestyle, schedule this in your calendar. That way you’re accountable for yourself.
Create a checklist or agenda for the review:
- Review the list of accounts you own
- Review the transactions in those accounts – look for any fraudulent or unexpected charges, and monitor the automated payments
- Look for opportunities to automate your payments
- Should you save more or less of your paycheque
- How are you tracking to your financial goals
Bonus: if you and your partner combine finances, this could be an exercise you go through together
Your Turn
Of course, all of these are easier said than done. Once you get started, these tips will help keep your finances organized. You will start to feel like you control over them.
And who knows, you might even look forward to being your own CFO!
Cheers,
