7 Ways to Simplify Your Finances
One thing we have not told you about yet is that back in January of this year, while I was unemployed, we were offered a lump sum of money (for free) to use towards opening a coffee kiosk in a local office building. To make a long story short it never happened, but not until we had done all of the pre-opening work. That is really irrelevant to this article, what I want to tell you about is how we went about doing things to get that up and running. And yes, this does apply to finances.
K.I.S.S.
Not the band, sorry. This is an acronym that everyone should apply to every area of their life. K.I.S.S. stands for Keep It Simple Stupid. The “stupid” is in there for a very good reason; we are! We have a tendency to muddy the water and always make a simple problem a big problem, or a simple solution an impossible solution. While we were thinking of what coffee to serve, which breakfast items to have available, what color scheme to go with for the kiosk and aprons, all the way to our dealings with the separate State agencies for zoning, licensing, and everything else, we had to keep in mind this simple acronym. If we would not have done this, we would have sunk and never gotten as far as we did. In every area, we just tried our best to keep it simple. Grow from there, but in the meantime, keep it simple!
Your Finances
Keep them simple, stupid. And I say that to myself as well, this is a reminder we all need to have. Only you will know how to do this to your personal finances but I have listed some of my personal strategies below.
Cut down on bills – One of the easiest ways to get a better hold of your finances is to simply cut back on the amount of bills you pay. You can do this two different ways: 1) cut the chord. Get rid of products/services that you may not really need and that are more of a luxury. 2) combine items onto one bill if possible. Say you have Internet, cable, and phone through two different companies. Combine all of these to one (Comcast or Verizon, for example) and pay them all at once! This may also give you a discount.
Pay bills using one method – Pay all of your bills via check, OR debit card, OR bill pay, OR auto pay, or whatever. Don’t mix and match them on different bills. I pay all of our bills via snail mail and check. This is old school but it is simple knowing that all of my bills are paid my check and are therefore in my check register. Mixing and matching is recipe for disaster, unless you have a solid system in place to hold you accountable.
Cash – Cash is so much easier to keep track of than the debit card. I personally cannot stand relying on the debit card. We are a cash family and will be as long as they are printing the stuff. It is easier to keep track of it and it is harder to spend it (you actually see it leaving you, never to return!).
Cash folder – This is a method that has been used for a very long time, but one that works, thus the longevity it has. You use cash right? Where do you keep that cash? Your wallet? Bad idea, for the most part. With a cash folder you are able to separate the cash for groceries, gas, toiletries, entertainment, or any other category that you use cash for. This method keeps everything in order, within budget, and is easy to keep track of.
Open communication (with spouse) – If you are married, or thinking about getting married at some point in your life, learn this and learn it now. The three most important things to remember when you are married are: 1) communicate, 2) communicate, and 3) communicate. One person trying to manage their finances is a nightmare. Add another person who is not of the same mindset (i.e. sex) and you have for yourself a recipe for disaster, if you do not communicate. The both of you MUST be open about every aspect of your finances with each other. Do not get in the habit of doing things without telling the other when it comes to your money. MONEY is the #1 cause of divorce in our nation, let that speak for itself. Do not think you are immune from that statistic, you must communicate. And it will be difficult at first, but once you open up that channel of communication, trust is right behind it and will push it for a very long time! (This also applies to roommates!)
Spreadsheets (not Quickbooks) – Keep track of your finances with something that is *Free* and *simple*. You do not want to have to spend too much of your time learning how to manage your money with a computer program, and you definitely do not want to spend money to manage your money. If you have to do that you will eventually mess up some where down the road and that will not only frustrate you because you screwed up, but you may have put yourself in the negatives all because you used something that a business would use. Take a look at the spreadsheets we use and have available for you, or make your own. Excel is not a difficult program to learn if you are just trying to manage your budget. Do a Google search for Excel tutorials and go from there…leave Quickbooks to the small business of the world.
Live within your means – This is the most simplest one of all. If you just live within your means, your finances will be SO EASY!! You want to make it hard on yourself, try spending more than you earn. Yeah, not going to work. Do yourself a favor and spend LESS than you earn. This way you are able to live off of what you earn and no more, you also avoid debt, and have the opportunity to save money each month.
There you have it folks. A simple list for simple finances. Apply one or all of these and I personally guarantee you will notice a difference in your personal finances.
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