Life can be hard enough without stressing over the economic impact of your family finances.
Many people lose sleep or give up time with family to pour over complex financial records. It doesn’t have to be that complicated. Here’s how to keep your finances easy, so tracking your assets and expenses is a breeze.
Why simplify finances?
Simplifying your finances helps you save money and time. It also makes it easier to stick to your family budget and achieve your short-term financial goals. Putting simple systems in place means you’ll get to enjoy the perks of stress-free family finances all while spending less energy and time managing them.
Setting everything up can take time and effort, but it’s well worth it in the end. Here are some of the perks of a well thought out financial process:
- Easier to track where your money is going
- Less likely you’ll forget to pay bills
- Better overall financial health, including your credit score.
- Less financial stress can improve mental health and physical health
- Easier to spot financial issues
Tips for simplifying
Just how can you simplify your financial process? Here are some ideas you can utilize for your own family.
Cut down on accounts and services
Most people don’t need multiple bank accounts. It complicates your finances and leaves you with the stress of tracking and balancing unnecessary accounts. Declutter and consolidate your family finances by closing old accounts. You may even save on bank fees or find some forgotten money!
Having a bunch of accounts for different financial pursuits can mean piles of paperwork lying around. You may not even read through all of the documents, but just their existence is enough to cause anyone stress.
Get rid of unnecessary paperwork wherever possible. You can do this easily by shifting your account notifications and statements to digital. If you’re already reducing the number of bank accounts you have, the amount of mail will drop anyway.
If you tend to forget to pay bills, automating your payments could be the solution. You won’t need to do anything once you’ve set up automatic payments. This works great for payments like life insurance that happen every month. Your account will do all the work, leaving you with more time for other things like your family life. Plus, you won’t have to stress about remembering to pay your bills on time!
Pay all bills at once
While auto payment is a good idea, you may not be able to cover all of your bills this way, or you may not want to. You can create a different system for bills you pay manually. The most common ones are:
Pay your bills right away. If you take this route, the goal should be to pay the bill immediately. You can pay online as soon as your bill or statement arrives or mail a cheque the next time you leave the house.
Pay your bills on the same day each month. If you don’t want to be constantly logging in online or pausing what you’re doing to write a check, set aside a regular time to make your payments.
From cash back to travel rewards, credit cards offer plenty of perks. On the flip side, they also offer the temptation of spending money you don’t necessarily have. A lot of cardholders struggle with this problem. Their normal income doesn’t allow them to pay off their credit card every month, leading to interest charges and higher balances. These increased balances make it even harder to pay off the credit card.
If you can’t afford to pay off your credit card every month, put your cards away and switch to cash. That might mean using the classic envelope system for your budgeting and spending. It could also mean having a specific checking account for optional spending and only paying with your debit card.
If you run out of money, you live with it. You spend nothing until your next paycheck. It’s a simple yet effective strategy.
The built-in accountability is a fantastic way to develop better spending habits or save for a goal like buying real estate. It’s a worthwhile endeavour, because once you’re in debt, climbing your way out can be hard.
Streamline a number of financial goals
If you set too many goals, you’ll lose focus. When overwhelmed, people often lose momentum and then may even stop altogether.
To avoid this pitfall, pick one or two major financial goals to focus on. Remember that one of them should be retirement planning because everyone needs retirement funds.
That means you can pick one more goal to focus on. It could be a short-term goal, like saving for a vacation or paying off a credit card. It could also be something more long-term, like paying off your student loans, setting education money aside for your children or, finally calling a realtor to buy a house.
Whatever you do, don’t slow your progress by spreading your attention and money too thin. True progress happens when you focus your attention on one to two realistic goals. Try doing too many things at once, and you’ll it harder to make progress with any of them.
Use simplifying tech
Streamline your finances by keeping them all in one easily accessed spot. There are plenty of apps that allow for money management on the go. Look for one with good reviews and includes the features that will help you the most.
Amalgamating all your financial information will give you a good overview of your financial situation all at once. This will help prevent you from forgetting an account or bill. It’s also more likely that you’ll catch a glimpse at your money growing month by month. That’s a great motivator to stay focused on your financial goals.
Managing family finances can be difficult, but there are ways to simplify the process and finally get control of your money. By using these tips above, you’ll be well on the way to making finances as painless as possible.
Hate managing finances so much that they’ve gotten out of control and now you’re in debt? Reach out to one of our certified credit counsellors today to talk about how you can get back on track!