6 Ways To Simplify Your Personal Finances
Managing your financial life can be a hard task, especially when you take into account all the places and ways you can spend money. You can simplify your personal finances in a number of ways that will not only improve your financial lifestyle but give you a successful future.
When there are less things to worry about, you can concentrate on the more important things, like a mortgage or car loan. This is about getting all the extra stuff spending or unnecessary expenses out of the way, so your personal finances become less of a chore and easier to track.
1. Use Cash For Your Personal Finances
In this day and age, most people only use a credit card but that can be detrimental to your finances. Not only will you be less likely to track your finances but you won’t be able to track your spending as easily.
When you use money, you can instantly see where your funds are going and how. This makes you more aware of your spending habits and how they are impacting your wallet.
Also once you spend all your cash, you will be forced to stop spending money because there will be none left.
2. Cut Up Your Credit Cards
You might be scared to do this at first but it will be worth it in the end. And yes, you can do this to cards with an active balance. Cutting up your cards will just stop you from racking up any more debt on them and force you to use the funds you actually have to spend.
If you feel like you can’t cut up every card, then do most of them or simply save one for emergency purposes. Once they are all cut up, throw them away and make sure never to use those lines of credit again.
With the debt you have left on them, pay that off and make sure to keep away from opening credit cards just because you can.
3. Consolidate Your Debt
Keeping up with multiple debt payments can be very hard and taxing on your personal finances. Instead, of making many payments at different times in one month, consider consolidating your debt.
A consolidation loan is when you take out one loan that will pay off all of your debts and just be left with the one loan to pay off. Essentially, you are combining all of your debts into one payment to make it easier to pay off at once. A consolidation loan could give you a lower interest rate and monthly payments a month.
However, to qualify for a debt consolidation loan, you must have good credit and be in good standing with your creditors.
4. Pay Your Bills at One Time
Instead of paying your mortgage, car loan and other utilities at different times of the month, think about paying them all at once. This will take care of your faster and be more efficient money wise.
However, make sure to pick a day in the middle of the month because if it’s too early you won’t have enough funds to pay them at once, and if it’s too late you might forget to pay them. If you pick a day in the middle, you will have money and won’t be late on the payments.
5. Combine Your Accounts
If you have multiple checking or savings account, you should really look to combine them. Not only will you be able to see the entirety of your money but you won’t be confused about how much you have in each account.
You will also not have to keep track of each one individually and will be more efficient with your time.
If you have a partner, consider bringing your accounts together. At first you may be reluctant but it will make your finances much easier. Not to mention, there will be more funds at your disposal.
6. Make A Budget and Stick To It
Set a plan out on how you are going to manage and spend your money. Make this plan as detailed as possible and then stick to it.
As you start applying your budget to your personal finances, you will slowly make changes to your spending habits. You will see these changes when you have a savings account, have an emergency fund saved and have reduced your debt.
The important thing to remember is that you stay committed and have a clear goal. Try to meet your goal often to keep yourself motivated and focused.
When it comes to your personal finances, it’s important to be goal-oriented and keep things simple. Don’t try to stack too many things on your plate. The less financial things you have to worry about, the easier it will be to keep up with your personal finances.