With each passing day, the demands on our time and financial resources increase causing us to do more in less time or spend more money on fewer items. When this situation occurs, it is important to realign our wants and needs with our values. When asked the question, “What is most important to you?” What are the first three or four things that come to mind? Your response could be family, work, health, money, education, or a number of other thoughts. No matter what your response, these are most likely your core values, what is most important to you. Whether you realize it or not, decisions you make are based on your core values. To simplify your finances, knowing your core values will help to make the process easier.
12 Tips to Simplify
Following is a list of 12 tips you can implement into your financial management routine to save time and money. Before you make any changes, however, evaluate what is overwhelming you or causing stress or anxiety. Don’t try to implement all tips and change how you do everything. Select a few that you feel will help you to simplify your personal finances, make better use of your time, and reduce the stress or anxiety.
1. Develop a budget/spending plan you can live with.
- No matter what your income level is, you need a plan for how you will spend your money.
- Developing a spending plan will help you see the different expenses you have and the amount of each of those expenses. You may need to revise the budget over a few months.
- Once you can see the big picture evaluate your expenses to determine if you can bundle utility expense, consolidate debt, or discontinue subscription services.
- To develop your plan, figure out a strategy that you can use to maintain your budget each month. A few strategies to consider are using an excel spreadsheet, budgeting apps, or a simple paper/pencil method.
2. Track your expenses.
- Tracking expenses will help you to know what you are spending your money on and how much you have to spend for each budget category.
- Keep tracking simple but make sure you record the expenditures. Do not “keep track in your head”, this method is difficult to maintain on a day-to-day basis and does not provide an accurate assessment of your spending for you to evaluate when developing the next month’s plan.
- You can track by spending category or by overall amount. For example, if you have budgeted $500 for food, track your food expenses by deducting the amount spent. Alternatively, if you know the amount of money you have to spend for flexible expenses (food, transportation, entertainment, etc.) deduct spending from the overall amount. The key is to stop spending when you are out of money.
- As with budgeting, find a method that works best for you. Try different mobile apps, your bank’s website or a paper/pencil method.
3. Contribute to an emergency savings account.
- Emergency savings is your back up for when something unexpected happens.
- Always incorporate savings into the spending plan.
- Start with as little as $5, think of ways to reduce an expense to find money to save more.
- Increase the amount you save when you can.
- Save any extra money received until your goal is reached.
4. Avoid using credit.
- Do not use credit when you do not have the cash to pay the bill.
- A credit card bill can make a tight budget even tighter.
- If you do have to use credit in an unexpected/emergency situation, plan to pay the balance as soon as possible.
- Set up a payment plan so you can pay off the debt in as few months as possible.
5. Set personal goals, financial and others, based on your values.
- What is important to you?
- What do you want to accomplish?
- What steps do you need to take to accomplish the goal?
6. Build relationships, not a stockpile.
- Your relationship with family and friends does not cost money.
- Surround yourself with people who understand and respect you.
- Make time to be around people who have the same values as you.
- Take time to declutter your space. Make it a place you want to spend time.
- Make sure everyone in your home is in agreement regarding what should be in your home.
7. Take care of your stuff.
- Everything you own costs money, if you take care of it, it will last longer and then cost you less in the long run.
- Take care of your home by cleaning on a regular basis. Make repairs as needed.
- Do not let dishes pile up.
- Take care of pets and cars.
- If you have children, teach them to take care of their things.
- When your stuff is in good condition, you will feel better about what you have and not feel like you have to buy more or something different.
8. Eat at home, plan meals.
- Studies have shown that consumers who plan meals, spend less money at the grocery store and eat better.
- Families who work together to plan and prepare meals are developing relationships.
- If you know you have a busy week prep food ahead for easy grab and go meals, or buy food that takes minimal preparation.
- Try to avoid picking up items at the grocery or convenience store.
- Exercise does not cost money.
- Exercising with others helps develop relationships.
- Exercise helps to reduce stress and improve health.
10. Cut out/reduce expenses.
- When you developed your budget, did you find expenses for items you do not need or use?
- Are you paying extra fees because you forget to pay a bill on time?
- Set up auto payments for expenses that occur on a regular basis.
- If you find you are spending too much on an expense, look at ways to reduce or eliminate the expense. For example, if you find you are spending a lot on home entertainment (movie subscriptions, gaming subscriptions, etc.) consider which you do not use as much and cancel the subscription. Alternatively, budget a reasonable amount, track the spending, and stay within the budgeted amount.
11. Manage your time.
- Time is a non-renewable resource; you cannot increase the amount of time you have to spend. Reflect on how you spend your time.
- Are you spending your time in a way that helps you be productive? And to meet your goals?
- Are you in control of how you use your time or are you letting your commitments control your time?
- Use a calendar, mobile app, paper/pencil or bulletin board on the fridge to remind you and your family of what needs to be accomplished.
12. Learn a new way of doing something.
- Think about something that you do and want to either improve the skill or find a better way to do.
- This shouldn’t cost money because you most likely have the supplies/equipment already.
Always keep your core values in line with how you manage your time and finances. It will be easier to complete the task and will impact more aspects of your life. Reduce the number of expenses you have to better live within your means and to need less time to manage your finances. Focus on your relationships and what you already own. Take care of both your relationships with family, friends, and your possessions.