So I figured with the deadline for Taxes fast approaching it might be a good time to talk about streamlining and organizing finances- so I dug into my archives and found a great post from about a year ago. I know this time of year everyone is always making financial resolutions, so here are a few tips to get you going.
I’m lucky to have great people in my life that are experts on so many topics- so I asked my friend Kelsa Dickey to share some advice on this topic. Over the last several years she has worked as a financial planner, an accounting supervisor, and now as an entrepreneur/small business owner of her own wildly successful financial coaching business- Fiscal Fitness. I’ve definitely learned a thing or 2 from her, and I thought I’d let her share the wisdom and wealth with you all!
Save $ by SIMPLIFYING and ORGANIZING
Organizing your finances is an organizing project that applies to each and every person…well, unless you’ve found a way to live your life without ever spending a dollar! Taking the time to organize your finances is one of the smartest investments you can make. Sure it might not be as much fun as your favorite hobby, but for every aspect of your life you organize, you free up more time and energy for the things you love. Plus, who couldn’t use a little less stress when it comes to money?
Before we can organize all of our financial paperwork, most of us could benefit from a simpler approach to managing our money. This will make filing everything easier!
Here are 10 tips and strategies for simplifying your money habits!
1) Get on the same page with your spouse.
If you and your spouse communicate about money, you’ll know what to expect, when to expect it, and how much. So the next time he has to spend money for a professional certification or a new tool, you aren’t surprised. You should aim to meet at least once a month to go over your expenses, keep each other in the loop, and set savings goals.
2) Merge your accounts.
If you are married and each of you has your own checking and savings accounts, you’re creating a lot of unnecessary confusion. Seriously consider using ONE checking account for ALL of your bill paying.
3) Keep a list of your bills.
Don’t try to keep everything in your head-chances are, you have too many bills with varying due dates and amounts to keep it all memorized. Make a list- in a computer spreadsheet or handwritten on a sheet of paper- that includes all of your bills, the amount, and its due date.
4) Pay your bills online.
Writing out checks, addressing envelopes, and paying for postage is inefficient and not at all cost effective. Set it up so you receive an email notification when your bill is ready to pay or add a recurring note on your calendar. You’re keeping a list now (see #3) but a little reminder can’t hurt!
5) Balance your checkbook every few days.
I know, who LIKES balancing a checkbook (okay, I confess, I totally do!) but why make it even more dreadful by dragging it out? By only doing it once a month, you’re making it way harder than it has to be. Do it every few days and the chore becomes quick and painless!
6) Use cash whenever possible.
Hate my last suggestion? Well, the more you use cash the less you’ll have to balance your checkbook! I used to get so annoyed when my husband would go to the gas station and spend $1.25 on a soda because balancing the checkbook every time there’s a dollar transaction is tedious. We decided to take $20 in cash from every paycheck to use for these types of transactions. One small change is all it takes to save you a ton of time.
7) Track your spending.
You can do this by hand (using something like an Excel Spreadsheet), or a website that will do all of the work for you. I love Mint.com- absolutely love it. It allows you to create a budget, and track all of your spending (by category)! Mint.com even puts everything into nifty pie charts or bar graphs for you!
8) Create multiple “sinking fund” savings accounts.
Many banks allow you to create free sub accounts and title them according to your goal- i.e. vacation, Christmas, insurance, car repairs, etc. Saving monthly for future expenses will help simplify your finances and reduce fluctuations from one month to the next. For example, pay your car insurance bill of $300 every 6 months but save $50 for it each month. Or if you get your hair cut/colored regularly, consider setting aside $20 or more a month so that the money is right there when it’s time for a touch-up.
9) Live as debt free as possible.
Until you do this, you’ll just have to take my word for it that this is honestly the simplest way to live. How many bills do you have to keep track of each month? How many minimum payments do you manage? The fewer payments you have going out, the easier your life will be.
10) Check your credit report annually.
You can do this for free at www.annualcreditreport.com and you should check it for yourself and any children over the age of 13. The sooner you catch any errors, the easier they are to challenge and correct.
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My fabulous friend Kelsa who authored this post is based out of Phoenix AZ- but thanks to the wonders of technology she now offers financial coaching nation-wide via phone/email/ and webconferencing.
From her website:
Our goal is to teach you to take control of your finances while becoming a trusted resource that you look to for financial advice. Meetings include a review of all income and expenses, analysis of all debt and savings, preparation of a cash flow plan, short term and long term goal setting, strategy for achieving your goals, and identification of areas for increased financial potential.
If organizing your finances is something you are struggling with, check out her website www.fiscalfitnessphx.com and contact her. I promise you will not be disappointed!
How do you balance your checkbook every few days?
ReplyDeleteDoes Kelsa mean, do the math on your checkbook register every few days, or does she mean, go online and check the bank's reckoning against your own?
Thanks for a helpful, timely post!
It seems like a monthly balancing should suffice. My experience is that balancing it as soon as the statement arrives is what saves time and trouble.
Great question Pink Overalls! Yes, I mean balance your checkbook every few days. For you, months sounds like a great plan so stick with what you're doing. However, I've found most people do not keep a check register let alone balance it to the bank balance. For those individuals, doing it once a month makes it too big of a chore. If they do it every few days, there's only a few days of transactions so it only takes a few minutes. And if something is off, it's easy to find the discrepancy. If you've been keeping a check register for a while, you're probably so good at it that once a month is sufficient for you- you're a pro! I hope this helps! Let me know if you have any other questions!
ReplyDelete(Oh, and I mean log into your checking account online and reconcile the balance w/ your check register throughout the month...)