15 Tips to Simplify your Finances

Finances are a pain, except for the super wealthy. For regular folks, finances just aren’t very much fun. Theres’ a ton of work to do, a ton of paper, and a ton of clutter. What’s a regular guy to do? Follow these 15 tips, and learn to simplify your finances.

1. Get a USAA Checking Account. Besides the great features like no fees, and ATM fee rebates, the killer feature of a USAA account is Deposit @ Mobile. Paper checks can be deposited instantly via your iPhone – from the comfort of wherever you are. Never again must you wait in line at the bank.
2. Use a single credit card for all your purchases. Stop using multiple cards, stop using store credit cards. One card for everything you buy. Note: This only applies if you are responsible with credit cards. If not, use cash for all your purchases.
3. Close any unused bank accounts. One checking account and one savings account is sufficient for most folks. Perhaps 2 savings accounts, if you use one for general savings, and one for emergencies. No more, though – just extra things to keep track of.
4. Consolidate your investments. This doesn’t mean invest in only one stock or fund – that’s crazy talk. You should have no more thank two brokerages, and only 2 if you have a 401(k) type plan through work. That’s your first brokerage, and your second one is for all other investing – stocks, ETF’s, and mutual funds. Keep it simple.
5. Go paperless. Seriously folks, it’s 2009. Being green is hip, and who doesn’t want to be hip? Besides, going paperless will drastically reduce the amount of mail you get. Credit card, banking, and brokerage statements can all come through email. Save them into Evernote for safekeeping, and so they’re handy at all times, and easily searchable.
6. Automate bills. I don’t automate all my bills – specifically, those which fluctuate drastically. But there are plenty of bills you can automate – cable, internet, cell phone, water bill. These bills stay pretty much the same every month, and there’s no reason for you to take the time to pay them manually. Set them up to be charged to your credit card, or deducted from your bank account automatically. Most banks have a Bill Pay service to help automate this.
7. Don’t check your 401(k) balance. Ever. Unless you’re on the verge of retiring, does it make a bit of difference how much your 401(k) is up or down? Nope. It’s money you won’t be touching for a long time, so let it be.
8. Set up automatic rebalancing for your retirement accounts. Select the percentages you want in each fund / category once, and leave it be. Your account will automatically rebalance itself every year, so there’s no need to fiddle with it.
9. Cancel old credit cards. This one won’t be very friendly on your credit score, so be careful. If that doesn’t concern you, then why not? No reason to get credit cards in the mail every few years if you don’t use them.
10. Pay off any revolving credit card debt immediately. If you still have any credit card debt that isn’t paid off monthly, get it done. Pay it off. Eat ramen for a year if you have to, but it needs to go away. Nothing will stress you out more than a big pile of credit card debt.
11. File your receipts immediately. When I get home from work or shopping, I immediately handle 2 things – mail and receipts. Receipts either get shredded immediately if there’s no need for them, filed into a monthly folder, or scanned into Evernote. Don’t let them pile up – you will lose some ( inevitably the most important ), and your desk / counters will look terrible.
12. Bundle Services. This doesn’t work in every case, but if you can combine services like Cable, Internet, and Phone on a single bill, you can reduce a few monthly bills. If you’re using automatic payments, this isn’t as useful, though it can save you money in some cases.
13. Rent instead of buying. Rent costs the same every month. Houses seem to cost more every month. Even with a fixed rate mortgage ( the only sane kind ), property taxes seem to go up, as does insurance. And of course the repairs and maintenance that go along with the joy of owning a home. Rent for simplicity.
14. Invest in Index Funds. It can be fun picking your own stocks. If you’re really good at it, you should probably continue. For the regular folks among us though, we’re not very good. Index stocks are as easy as it gets. You get diversity in a single fund.
15. Read the Simple Llama. Though this isn’t a personal finance blog, you’ll learn how to simplify your life. Before long, you’ll carry that philosophy over into your finances. (Shameless plug, I know.)