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7 Ways To Simplify Your Finances

March 12, 2019 · 6 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

7 Ways To Simplify Your Finances

Complicated finances? Sometimes, there’s nothing easy about money. The older you get, the more obligations you seem to have. Between savings, IRAs, 401(k)s, bills, mortgage or rent payments, car loans, and more—sometimes it can hurt just to think of it all. And when things seem overwhelming, it can be easy to procrastinate important financial decisions.

If your finances are causing stress to creep into your life, it may be time to simplify. Try a minimalist money management approach to your finances and see if you can make things a little easier. With these simple money management tips, you could cut some complexity out of your personal finances, manage your money more efficiently, and maybe even relieve some stress.

7 Simple Money Management Tips

1. Automate Whatever You Can

One of the easiest ways to simplify your finances? Set up auto payment whenever possible. Putting your finances on autopilot means one less thing for you to think about, and when it comes to monthly expenses, you won’t have to worry about late payments.

Most banking apps allow you to set up recurring bill payments or transfers. It’s also worth automating any other transactions. If you’re participating in your company’s 401(k), set it up so that the contributions come directly out of your paycheck. If you’re saving for a child’s education or to buy a home, set up an account where you can direct regular autopayments.

2. Go Paperless to Save Your Sanity (and the Earth)

A major culprit of personal finance-related headaches? Paperwork. Keeping track of the many documents—all those receipts, investment reports, bank statements, tax returns-—can be a struggle.

Many services allow you to opt-in to a paperless experience instead. You’ll have access to all of the documents when you log into your account.

With everything just a click away, you never have to worry about finding misplaced paper documents.

And if you’re interested in leveling up your organization, you could even set up a digitized archive of your important information and files on your computer or an external hard drive, so you never have to spend hours searching through file cabinets and miscellaneous envelopes.

When it comes to day to day purchases like groceries, gasoline, or dinner out, more and more vendors offer email receipts. There are many apps that help you with transaction receipts, allowing you to snap a photo and then store receipts digitally. Some of the top ones include Expensify , Smart Receipts , and Zoho
Expense
.

And for filing your paperless statements, try FileThis . The app captures receipts, but it also seeks out your online statements and bills and automatically downloads and files them to the cloud. It even finds documents from the last three years.

3. Consolidate Accounts Like a Boss

Whether you’re married with three kids or single with two Labradoodles, you probably have way too many financial accounts. It’s time to take charge and consolidate them.

There are all kinds of ways to simplify your life and save money by consolidating. If you’ve done a lot of job hopping in your career, you could have multiple 401(k)s floating around. Take the time to roll over 401(k)s from old employers into one IRA. Then you have all of your funds in one spot, and you’ll also be able to select from a wider selection of funds and investments than the ones selected by your previous employer.

When you leave a company but don’t roll over your 401(k), you’re often subject to fees that your employer may have been covering while you were employed. By rolling your 401(k) into an IRA, you can potentially minimize fees and help increase your personal cash flow.

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If you signed up for a variety of credit cards, chasing the promised rewards they offered, you may want to minimize the number you actually use. Find the card that offers you the most in return, whether that’s cash back, travel rewards, or other perks, and focus on using only that credit card.

Don’t cancel your other cards, because it could affect your credit score. Just store them away in a secure place and let them take a well-earned rest from spending.

You may have several checking and savings accounts, even at different banks. Do you really need them all? Review your accounts and if you see any room for reducing, now’s the time to do so. And with some hybrid cash management accounts, you can earn interest and possibly pay no fees.

Finally, consider bundling your insurance policies. Many companies offer substantial discounts if they write both your auto and homeowner’s policies. Shop around for the best deal. It can take some time, but it’s one of the simple money management tips that can really pay off.

4. Go Debt-Free. Be Worry-Free.

Want to relieve stress big time? Try this minimalist money management idea: Go debt-free. Or as close as you can.

If you’ve never known the relief that comes with paying off a sizable loan or obligation, you owe it to yourself to try. Not only will you be fielding fewer loan payments from lenders, but you’ll also free up cash flow for something better, whether that’s saving for a home or a trip around the world.

The two most common strategies for paying off debt are the debt snowball method and the debt avalanche method. The debt snowball method encourages you to pay more than the minimum on your smallest loan first, regardless of interest rate. This method is designed to incentivize you to continue focusing on repayment by creating rewards along the way. As you pay off each debt, you’ll feel accomplished and inspired to continue crushing your debt.

With the debt avalanche method, you’ll focus your repayment efforts on the debt with the highest interest rate first. While it may take you longer to see progress on your loans, you’ll most likely pay less money in interest over time using this method.

5. Sell Stocks to Buy Mutual Funds

Keeping up with individual stocks can be time-consuming. You have to constantly research the companies you’re invested in and look for new opportunities. Plus, you have the pain of actually buying and selling, which involves monitoring your online brokerage account.

With mutual funds, it’s more of a set-it-and-forget-it process, although you may want to re-evaluate your portfolio mix on a semi-annual basis, depending on your situation.

Mutual funds, which invest in a pool of assets, may offer better value for your time—and the dividends from your mutual funds are automatically reinvested.

Another option to simplify your online investing experience: Invest in an account that offers automated-investors and automatic quarterly rebalancing, like SoFi Invest®. And when you open an account with SoFi, you’ll have access to a team of financial advisors who can help you establish your financial goals and set a plan to help you reach them.

6. Focus Your Goals

It’s good to have goals. Most of us have plans to buy a home, retire someday, or put our kids through college. But sometimes, we have too many goals. Just as you can simplify your accounts and bill paying, you can employ a minimalist money management approach to your financial goals.

The key is to focus on the most important goals, then save with gusto until you reach them. You’ll enjoy greater satisfaction when you attain the goals that mean the most to you.

7. The Stress-Relieving Power of an App

One of the ways to relieve financial stress is actually creating and using a budget. It may seem like a lot of work to the carefree, but budgeting will help you organize your financial life and make it easier to keep everything on track.

If you’re not sure where to start, there are a wide array of apps that help you not only budget, but track, bill-pay, and otherwise manage your financial life. Most allow you to access all your financial accounts in one place, pay bills, create a budget, and stick to it. You can also use SoFi Relay to keep tabs on your cash flow and spending habits to help in creating your budget.

Simplify and Destress

Simplifying your financial life may take a bit of legwork up front, but in the long run, it could help you alleviate stress and plan for your financial future. As you’re reviewing your accounts, make sure they’re doing the most they can for your money. And if they’re not? It may be time to make a switch.

One option is SoFi Money®, a cash management account that seamlessly combines earning, saving, and spending all in one product.

Once you start simplifying your personal finances, you can begin to enjoy life just a little bit more. Learn how SoFi Money can help.



Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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