Simplify Your Money Situation in 6 Steps

As hard as it may be for you to believe, money doesn’t have to be complicated. Sure, there are complexities with anyone’s money situation, but there are always opportunities to simplify. My dad used to say “K.I.S.S” AKA “Keep It Simple Stupid”. Don’t make things more complicated than they need to be, especially your money!

Wherever you have the opportunity to simplify and reduce complexity with your money, take full advantage. Not sure where to start? I’m sharing a few ways you can simplify your money situation and keep things as simple as possible. The easier you make things in your finances, the more brain power you can give to working on your financial goals!

Simplify Your Money Situation in 6 Steps

#1 Get organized 

One of the best ways to simplify your money situation is by getting organized. Depending on your current situation, this may require quite a bit of upfront work. However, once you make the time investment, things will be much more efficient down the line.

What does it look like to get organized? A few things! First, you should always know where all of your accounts are and what your standing is with each of them. This includes checking and savings accounts, debt/credit accounts, medical accounts, retirement accounts, and insurance plans. I suggest creating an excel spreadsheet that lists out all of your accounts, where the account is and what the purpose is for each account.

Another way to get organized is by listing out all of your credit and debit cards (numbers not required) and getting clear on your purpose for each of them. Can any debit cards be closed out? Where are the cards currently? What’s the purpose of each card? A list of this information will always come in handy.

Finally, you can get a financial filing system in place for yourself. Listen to CGS podcast episode 21: Setting Up Your Own Financial Filing System for a step-by-step walkthrough!

#2 Automate wherever you can

Automation means you set up a system or process to run automatically, taking out the need for consistent, manual actions. Things that can be automated in your money situation include:

  • Income received (direct deposit versus manual paychecks)
  • Paying bills (auto-pay versus mailing a check)
  • Saving money (automatic transfers versus depositing cash)

Automation is a great way to simplify your finances because it takes a lot of manual work off the table for you. Things are running in the background, on autopilot, so you can focus on other things. Automation makes your life so much smoother, so don’t procrastinate getting your systems up and running!

#3 Find a budgeting process that works

Budgeting is not one-size fits all. What works for some may not work for others. What doesn’t change is the fact everyone needs a budget. That means you’ll want to find a budgeting method that works for you. Trial and error is a good thing here. Don’t be afraid to try different strategies and methods until you find one that sticks.

For me, I use the zero-based budgeting method, combined with manual spending tracking. I help my clients use this process as well. Someone else could thrive on the 50-30-20 budgeting method and keep tabs on their spending through an app. There’s no right answer, you just have to find what works for you.

#4 Get rid of accounts you don’t need or use
Remember that list we put together in the first tip? Time to put it to use! Any account or service that you have and don’t need or use, get rid of it! The more accounts, subscriptions or services (even things around your house) that you have and don’t use, the more cluttered you feel (mentally and physically).

Review the list of accounts that you have and spend time closing any out that don’t serve a purpose. If you can re-purpose accounts, that works, but if not, don’t be afraid to close them out. The only exception is credit cards. Even if you have $0 balances, you’ll want to keep those cards open because it helps your credit history. The more history you have (AKA the longer your accounts are open), the better your credit score.

#5 Focus on 1 money goal at a time

When you focus on too many things at once, your attention and resources are divided out to many things. That means it will take more time to accomplish those things. Instead, focusing on one (or two) goals at a time allows you to devote your mental and physical resources to seeing that goal through.

When it comes to your money, unless you have a large profit every month, it’s best to focus on one money goal at a time. Put all of your extra resources towards that goal. When you’ve accomplished it, move on to the next goal. Now, if you have a large monthly profit, you can allocate it to 2 or 3 goals if you’d like. 

#6 Make more than you spend

The final way to simplify your money situation is to make more than you spend. This will make your life so much easier. When you spend more than you make, you open the door to debt and use savings when you shouldn’t – that doesn’t sound so simple! Instead, only spend what you have coming in and strive to have a profit every month. That profit can go towards your savings or goals.

Leverage your budget to understand the minimum amount of money you need to bring in to cover your expenses and spending. Then, work to bring in more than you need. If you can’t seem to make your income work, find ways to cut back. You can also seek out additional streams of income.

At the end of the day, functioning in the negative is never wise and doesn’t make things easy. Focus on making more or spending less and things will get much simpler for your money situation!

Related: 5 Financial Loose Ends to Tighten Up Immediately

I’m fully aware that trying to implement each of the tips above at the same time is not simple. So, take it one step at a time! Start at the top and work your way down. Conquer one step at a time until you feel in control of your money and things are as simple as they can be. What ways are you working to simplify your finances? Have you followed any of the steps above? How did they work for you? Drop a comment below to share!

-Raya
The CGS Team
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