5 Ways to Simplify Your Financial Life

Does your financial life seem chaotic and crazy? When it's time to pay your bills, do you know exactly where you put them? I'm wondering how you are simplifying your financial life. Are you spending more on a monthly basis than you're actually making? Do you have several bank accounts that you need to keep track of each month?

Financial success is not only about paying attention to where you spend your money and diligently saving, but it's also about taking other action steps and creating systems that simplify and make your financial life easier.

Keeping your financial life simple takes away the clutter (in your work space and in your mind), helps you think more clearly so you can make better financial decisions, and gives you financial peace. There are many ways to simplify your financial life. Here are 5 ways I recommend you get started:

1. Get control of your spending. Start buying only what you need — see how much you have saved by the end of the month, and put that amount into a savings account. Reward yourself for your hard work — maybe with your favorite dessert or lunch with a friend. Be mindful not to spend all your savings on the reward! Gradually, work on creating a monthly spending plan that you'll feel good about and commit to each and every month. You see, planning your spending each month is actually easier than just winging it and then wondering, worrying or hoping you'll have enough money at the end of the month for all your expenses.

2. Pay your bills on time and automate. Paying bills in a timely manner is important for several reasons -- peace of mind, a good credit score, and because it's your responsibility! If you're unable to pay your bills on time because of cash flow issues, you'll need to take a really close look at your spending. Yo'’ll either need to decrease your spending or increase your income to get intobalance at month-end.

To simplify paying your bills, automate them. It'll save you lots of time — time you can spend doing the things you really love. Sign up with your bank; it's typically a free service. If it isn't free at your bank, find a bank that offers this service at no charge.

3. Manage your mail and paperwork.

a. First, sort your mail into several piles — bills to be paid, junk, and other items that need attention.

b. Place your bills in a separate area designated only for unpaid bills — you can find different organizers at your local office supply store.

c. Schedule paying your bills every week -- write on your calendar what day during the week you'll pay your bills. Putting it on your calendar, just like you would an appointment, gives it the same importance, so you’ll be less likely to skip over it. As for the junk mail, immediately toss it in the trash!

4. Eliminate unnecessary checking and savings accounts. Close all accounts except two — one checking and one savings account. I've seen clients who have several accounts — typically small balances in each account with no real designated purpose. Keep the number of your accounts to only what is necessary. The more accounts you have, the more work it is for you to keep track of account balancerequirements and potential fees if you drop below the minimum limits.

5. Cut up those credit cards. How many do you have? Why do you have so many? I recently worked with a client who had a total of 12 credit cards. Fortunately, most of them had $0 balances. She had opened them initially for different reasons and along the way had lost sight of why she really needed them — because she really didn’t! Even though she hadn't accumulated debt on these cards,having them, weighed her down.

We worked through the list and, one by one, she closed them all except two that she wanted to keep. Initially, she resisted doing this task, but once she got started, she realized what a relief it was to get rid of the clutter. This was an important part in simplifying her financial life. It was so much less for her to keep track of and have to think about.

Simplifying your financial life will help keep you on financial track and help you to reach your financial goals. I hope you'll implement these action steps and begin living a more simple and easy financial life. If you do, you'll be on your way to financial peace!