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How to Simplify Your Finances

woman working on finances

Why declutter your finances? Here are just a few excellent reasons to cut back:

  • Fewer expenses to worry about
  • Less interest from things like debt and unpaid credit cards
  • Automations that make it less likely to miss a payment
  • A more organized financial portfolio for your records

When figuring out how to simplify your finances, we urge you to think beyond merely eliminating costs. Instead, consider your lifestyle and find ways to streamline how you interface with your bills, your bank, your needs, and your wants.

1. Use Only One Credit Card

Even something so simple as opening up a new credit card account can seriously impact your credit score and profile. This is to say nothing of the dangers of using the card—high-interest rates, hidden fees, and more may plague you long after. Using a ton of credit cards may also make tracking your spending more difficult in retrospect.

Instead of a new card, opt into memberships and rewards programs where you shop. These perks cost nothing and don’t come with a line of credit attached. You’ll thank yourself in the long run.

2. Go Paperless

man shredding documentsChoosing available paperless options is one great way to keep all your records organized and in one place. Many companies allow you to access important documents from anywhere after going paperless. You might even be able to capitalize on any bonuses your utility companies or lenders offer.

3. Automate Whenever Possible

Direct deposits, regular automatic payments, and other conveniences take the extra task off your plate. As long as you’re able to stick to your budget, you’ll be able to enjoy the freedom of an optimized workflow that ensures you never miss your deadline.

With automatic payments, you’ll know exactly when your money will be taken from your account. You can also arrange all of your bills to charge you around the same time each month if that is your preference.

4. Use Cash When You Can

Paying in cash has many benefits, like no interest, and you’ll hand over the entire asking price, which can help avoid overspending.

Psychologically, it’s much easier to overspend with a credit or debit card. Dave Ramsey recommends using a cash envelope system. If your entertainment envelope is low by the end of the month, you might reconsider some of your expenditures.

5. Cancel Unused Subscriptions

Signing up for something seemingly fun or useful is almost too easy, especially with a week-long free trial or any other enticing offer. After performing our own financial audit, we found that we were signed up for a ton of stuff we don’t even use.

Take it from us, though: it’s a pain to cancel unneeded subscriptions, even with helpful apps like Truebill. Instead, it’s much better to avoid signing up for new streaming services, subscription-based apps, and other expenditures in the first place. Our rule of thumb: try to keep only one service in every category (your preferred streaming service, for example).

6. Pay Your Bills Early

Paying your bills on time and early builds your credit. This habit may also net you a lower premium in the long run or discounts exclusive to those with an excellent track record.

Paying only the minimum balance on your credit card every month also means paying much more interest on the back end. Why not put that money back into your own pocket? If you can, pay it off and be ahead of schedule.

7. Cut Out Unnecessary Purchases

If you are one to pick up a ton of extra stuff every time you stop by Target, we’re here with you. These additional purchases may be putting you out. This is a great place to begin if you’re learning how to simplify your finances.

Those adamant about simplifying but finding themselves weak at the point of sale should write every purchase into a small notebook immediately after getting the receipt. It’s a foolproof system, and the habit can be eye-opening—we spent how much on fast food last week? Simplify your life and save money.

8. Budget Wisely

Many experts recommend using last month’s income for your monthly budget. It pays to set realistic goals, and meeting them is not just beneficial to you financially—it can also be immensely gratifying.

You work hard for your money. Adhering to a great monthly budget is the perfect way to put control in your hands. Empower yourself by never spending into thin air; if you tend to splurge, you’ll notice the difference in your bottom line.

How to Simplify Your Finances and Save More

Your financial stability will often involve planning, goal-setting, and action. The first step? Identify where you struggle and do everything possible to keep yourself on track. Consider us your go-to budgeting tips for any income level.

Sometimes, a much simpler picture is all it takes to turn your finances around. After clearing the air, it’s much easier to see what truly needs to change.

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