Simplifying your finances is very important to survive a good life. You must know the easy ways of simplifying your finances and how to simplify your finances.
I know simplifying your finance does not sound very exciting but it’s important for you to know How much money are you earning? Where are you spending your money? How can you pay off your debt? How can you save your money?
For you, in this post we will cover the easiest and proper ways to simplify your finances and how to actually simply finances, what to do and what not do, everything will be covered.
How to Simplify Your Finances
- Consolidate Your Bank and Retirement Accounts
- Consolidate All Credit and Debit Card
- Get Rid of Paperwork as much as you can
- Get Out of the Debt
- Invest in Funds Rather than Individual Stocks
- Focus on one financial goal at a time
- Do as many side hustles as you can
- Don’t take a new loan for paying your existing loans
- Automate your credit card payments
- Save money on your daily expenses
- Automate your savings, use apps like Trim and Acorns
- Plan about your finance
- Don’t buy anything by taking the loans
- Simplify your investments
- Consolidate high-interest debt
- Cancel unused subscriptions
- Pay your bills in advance
Simplifying your finances includes consolidation of things, saving your money, cut down your extra services, focus on things at one time. To simplify your finances, ways of simplifying finances are divided into the subcategories which makes it easy to understand for you.
1. Consolidate Your Bank and Retirement Accounts
Bank offers you a huge bonus and offers for opening accounts in their bank. And because of different credit card rewards, for taking a loan and any for other reason most people open different various types of bank account i.e checking and savings account and retirement accounts.
If you have also more than one account, consolidate your all bank and retirement accounts into a single bank and retirement accounts. Use any one bank for opening accounts and any other financial use. Choose a bank that has a low service or maintenance charge for opening an account.
It will not only reduce your paperwork but also reduce different types of service charges of your different bank and retirement accounts and it will be easier for you to manage your accounts.
2. Consolidate All Credit and Debit Card
I know it’s very difficult to control yourself from that huge sign-up offer, latest rewards, zero interest, and many more things that make you loudly say to use different credit and debit cards. But, as time passes, all these zero interests start going away and these cards start taking your money.
But, all these things are just for making money from you. You think that you are getting benefits by opening different cards and it will help in bad financial conditions.
I, myself, had opened different credit and debit cards just for the sake of credit card rewards and sign up bonuses. But, I observed that instead of earning money from cards, I am losing my money by paying the different charges.
So, consolidate your different credit and debit card into single a credit card that has low service and maintenance charge and that is available in most stores so that you can use it while buying any product and service.
3. Get Rid of Paperwork as much as you can
If you have multiple accounts and cards, you must have a bunch of papers like bills, statements, a copy of any document, etc. It’s very difficult to handle huge paperwork, you have to take a time to read them, to see whether it is of use or not, to place it with care.
Instead of carrying this bunch of paperwork, switch your finance into a smarter way, a digital way. Open your net banking, use online shopping and online payments as much as you can.
If you want any of your documents, you can store it in a digital way where you will not have fear of losing documents. You can scan all your documents and store them into different places like Google Drive or any platform.
As I mentioned in the previous card consolidate bank account and credit cards, you will not get a bunch of paperwork for your online payments. And for doing online payments, you will not only get rid of paperwork but also save you money by getting huge cashback in the different online stores.
4. Get Out of the Debt
Getting out of debt is very important to simplify your finance. It will not only simplify your finance but also give your life relax and make you able to make more money by doing different side hustles. But, paying off your debt is not as easy as you are thinking.
Until and unless you will be in debt, you can’t get your profit. It doesn’t matter how much money you make. All your savings and money go into paying off your debt. Debt-free life will make your life more relax.
I know paying off all your debt is not easy and it can’t happen overnight. But, it can be done by a proper plan and strategy. Try to do as much as side hustles you can. Cut off the service that you don’t use. The main thing is to spend less and make more money.
5. Invest in Funds Rather than Individual Stocks
Investing in individual stocks is not as easy as you think. You can’t buy or sell any stocks just by seeing information on any website. You need proper research before buying or selling any stocks.
And investing in individual stocks is very complicated as compared to different funds like Mutual Funds, Money Market Funds, etc. Because of lower risk in funds, returns from funds are low as compared to that of individual stock trading.
For investing in individual stocks, you have to download different apps for stocks research, stockbroker, and many more resources. While investing in funds you need only one app from which you will invest and everything will be done by that fund.
6. Focus on one financial goal at a time
It’s very important to set a goal in life. Because, without goals, you can’t achieve success in the life. But, when you set more than one or two goals in your life, it’s very difficult to achieve them. Having more goals, makes you life not only stress but also divert in wrong path.
And because of achieving more goals, you try to take a debt of high-interest rate. And instead of achieving goals, your all money will be wasted in paying off the debt. So decide few goals at one time it can be anything like buying a luxurious car, house, smartphone or anything else.
It doesn’t mean you can’t have more than one or two goals. Try to achieve one or two finance goals at one time, do your best to achieve them. When you have limited goals, you know how much you have to earn and spend.
7. Do as many side hustles as you can
An intelligent person never depends on a single source of income. Always try to diversify your income, try more and more side hustles. Always have a backup of one or two sources of income, so that, any one of the business get fail, you must have another one source of income.
If you have already a business or a job that is going well, still you must try a new side hustle that can make extra money for you. Try different side hustles like starting any small startup, youtube, blogging, e-commerce.
8. Don’t take a new loan for paying your existing loans
This is the biggest problem of people who are new in maintaining their personal finance life. Never ever take a new loan for paying off your existing loans. If you try to do this, you can never pay off your debt in your whole life.
When you continuously start taking a loan, your all money will be wasted in paying off the interest of your all loans. And if you take a loan that where the interest is included in the principal loan then it will be very hard for you to pay off that loan because of high-interest rate.
9. Automate your credit card payments
It happens most of the time that we forget to pay our credit card payments. Because of that thing, you have to pay a fine for paying the credit card payments late. By automating your credit card payments, you can automatically pay your credit card payments before the due date.
You can easily automate your credit card payments by visiting and contacting to your bank. While some credit card issuers offers this payment option for your credit card. Or when you buy and sign up a new credit card, you will get a option of automating your payements.
You can also use the Trim Financial Manager app for automating your credit card payments. When you automate your credit card payments you don’t have to worry about the due date, just deposit money in your trim Account and your credit card payments will be paid automatically.
Set fixed amount of dollars that you want to pay. You can also fix any date or before a date when you want to pay the payments. If you do not want to automate your payments, you can set alert for that payments and you will be notified when due date comes.
10. Save money on your daily expenses
The biggest mistake that most people do is they just ignore the saving on their daily expenses and only focus on the big expenses. But, it is important to save your money on daily expenses.
Now, the ways of saving on your daily expenses are vary from person to person. Like, if your order foods and groceries in daily use, make sure to use the coupon code to get a cashback.
While buying anything from amazon, download an extension that shows the history of the price of any products so that you can know that the product has a higher price or lower price as compared to the normal price. These things will save your money a lot and simplify your finances.
If you any product that you don’t use now, just sell that thing. You can also request for reduction of credit card rate so that when you buy anything online, you can save your money.
According to your expenses try to figure out where you waste your money on daily expenses and try to save that money.
11. Automate your savings, use apps like Trim and Acorns
Both Acorns and Trim is best for saving money. Acorn’s round-up feature makes it very useful. It automatically saves your money from your transactions and invests that money in Acorns. You can use Acorns for saving money from daily chores transactions.
I have been using Trim since 2018. Trim helps you to lower the cable, Internet, and phone bill with ANY provider up to 30%. And It gets you out of credit card debt by automatically paying the regular payments. By using Trim saving, it can really help you in paying your daily transactions.
It helps me in saving $50-60 monthly. The best about Trim for me is getting up to 4% back with trim savings. The best hack or feature of trim is getting out of the debt of credit card interest by automatically paying the regular payments.
The only thing which I don’t like about Trim is its price. It’s normal for a person who spends more money. But, a person who is in debt or who don’t spend more money can’t afford this.
12. Plan about your finance
Planning about your finance is one of the most important things to simplify your finance. But, not only planning your finance is important but planning your finance in the right manner with proper strategy is important. Now, it varies from person to person to plan their finance.
Very basic steps of planning your finance are just right down about your expenses, how much money you earn in a month, what are your goals, how much money is needed to achieve your goals. Note down all these things and think about how can you do all these things.
13. Don’t buy anything by taking the loans
If you are doing the mistake of buy any product by taking new loans, you are never going to out of debt and your finance is never going to be simplified. Because, instead of paying off the debt and payments, you are buying more and more products with the help of high-interest debt.
Many banks and companies will offer you different types of loans like Car Loans, Student Loans, Personal Loan, Business Loan, etc. But, these all things are just traps of getting into the debt. Do not take any new loan unless you do not have a high requirement of it.
14. Simplify your investments
Simplify your all investments in order to simplify your finance. If you have a simplified source of income, it directly means that you have a simplified finance. When you look at your investments, you can easily understand where you have invest your money, how much is there.
All those accounts that you use to trade and invest your money, consolidate them into IRA (Individual retirement account), and the best online stock broker that has a low brokerage with useful features and tools that can help you in buying and selling your stocks.
Invest your money in funds like Total Market US Equities, Total Bond Market, Total Market Int’l Equities, so that you can keep an eye on your investments. Simplifying your investment doesn’t mean that you should not diversify your investment.
15. Consolidate high-interest debt
Debt consolidation is a very great way to pay off your high-interest debt. Debt consolidation helps you when you have multiple loans with a high-interest rate and high principle amount (more than $10,000). It may hurt your credit card score but can really help you to get out of debt.
You can consolidate your multiple loans either into peer to peer lending or traditional bank loans with low- interest rates. If you have credit card debt then you can consolidate into a new credit card that provides low-interest payments.
When you consolidate your debt into a new loan that is secured with an asset, there is chances of tax deduction too. But, when you close your all credit card and open a new credit card, there is chances of reduction of total amount available.
16. Cancel unused subscriptions.
In this digital world, we have subscribed to lots of services and things. Sometimes, we forget to use them but we still paying for those subscriptions. So, cancel your all unused subscriptions if you have subscribed to any online service those you do not use now.
If you subscribed any services related to the Google like Google Play Music, Google Play Movies and TV then you directly find all those subscriptions in Google Play Store and directly unsubscribe all those subscriptions.
17. Pay your bills in advance.
Paying your bills in advance is going to help you a lot in simplifying your finance. There are many bills like cellphone bills, tv bills, or credit card bills that have a due date to pay their payments. And, if you miss the due date, you have to pay the penalty.
Not only bills but also installments or payments of your different student loans, personal loans. You can select any date of your month and pay your bills on that same date. There is an alternative to this, you can automate your payments online that helps you to simplify your finance.
WHY SIMPLIFYING YOUR FINANCES IS IMPORTANT?
Simplifying your personal finance is very important, it not only manages your money but also reduces stress in your life. Helps you in managing and tracking your money within few steps. Whenever you need any information about your money, you easily get it.
You have a proper idea about your money like how much money you are earning, what are your source of income, how much money you are spending, how money is required to achieve your goals, what things you can buy.
By simplifying your finances, you do not have a headache of managing paperwork. Since everything will be in proper manner and in a digital store. There are fewer chances of forgetting your different bills like cellphone bills, tv bills.
You will be debt-free or minimum you have an idea that when and how you will be debt-free. You get rid of high-interest debt of credit cards and different banks. All your accounts get consolidated into a single account which makes it easier to keep an eye on your money.
So this is how you can simplify your finances. You can’t actually simplify your finance until and unless you won’t find it useful and important.
But, you must understand that simplifying your finances is equally important as that of earning money. If you have several passive incomes or active incomes but you don’t how to do simply your finances, you actually can’t manage your money.
What do You think?
What do you think about simplifying your finances? How important is it? Let me know your opinion in the comment section.
And tell me If I miss anything related to simplifying finances in the comment section. Your opinion and thoughts will be appreciated.