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7 Killer Ways to Simplify Your Financial Life

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

The simpler your financial life is the more secure it will be. When you spin lots of plates you increase the odds of having a few fall and break into a million pieces.

I’m not suggesting you sit home, bury your head in the sand and keep your money under the mattress.

As Albert Einstein said, “Make things as simple as possible, but not simpler.” What follows are 7 simple ways to streamline and expand your financial life at the same time. Let’s get simplifying.

1. Put Your Bills On Auto pay

Have you ever forgotten to pay a bill? I have. What irked me was that I had the money but neglected to pay the bill because I wasn’t organized and overlooked it as a result. That was dumb.

I failed to live up to my promise to pay the merchant and I dinged my credit score needlessly. This was over 25 years ago but it still bugs me.

Well, I promised myself it would never happen again and it hasn’t.

The reason? I use auto pay for everything possible. Some people have credible concerns about security and I understand that.

I’m not worried about it and I’ve never had a problem with maintaining the integrity of my online security.

And because my creditors are paid automatically I have the comfort of knowing that all my bills are going to be paid on time. That far outweighs the slight security concerns I do have.

2. Consolidate Bank Accounts and Credit Cards

While automating bill payments is my favorite financial simplification tool, a close second is minimizing the number of bank accounts and credit cards I have.

I keep one business card and one personal credit card. The same goes for bank accounts – one for business and one for personal.  Some people need more than that….but most do not.

Because I only have two credit cards it’s easier to review and reconcile my statements. That gives me a simple and quick way to review all the charges on the cards.

If I had 5 cards I probably wouldn’t be so meticulous. But since I have so few cards, I have no excuse.

As a result I review each charge very carefully and find more mistakes that could have been overlooked. So this move saves me time and money. Yum!

What’s true about credit cards is even truer regarding bank accounts. Because I only have one bank account for my personal life and one for my business, it’s a snap to see what I’m spending each month. And I only use one bank for both personal and business.

In addition to tracking my expenses through software, I also look at my bank account to get a big picture overview.

As I’ve explained before, if I look at the “total withdrawals” number on the bank account, it summarizes my total outlays for the month. Very quick. Very simple. Very nice.

3. Consolidate Investments

Your next step to a wonderful and simple financial life is to consolidate your investments. There is no good reason to have personal investment accounts all over town.

I suggest you keep all your personal accounts at one custodian under one account number and maybe one other account for all your IRA’s.

If you are self-employed, you might also need a SEP or Personal 401k and if you are employed you might also have a 401k or 403b. Definitely speak with your tax advisor before taking action just to be safe.

You don’t have to sell anything. You just consolidate all the investments you hold under the same title into one account. How cool will it be when you don’t have to worry about where your money is because you know?

4. Auto Invest

While we’re on the subject of investing, why not automate that as well?

Once you figure out how much you need to save each month, have it taken out of your checking account and placed into your investment account through an auto-debit arrangement.

This is a great way to make sure your money gets invested on a timely basis. It’s also a great way to make sure you actually save the money rather than spend it.

5. Budgeting

I mentioned the importance of solidifying your credit cards and bank accounts. Once you do that it will be easier to track your spending – the key to financial security.

I strongly recommend using a software package to track your expenses and to budget. But regardless of how you do it, just make sure you use a system that is easy and (dare I say it) fun.

One of the most important criteria for me is the ability to download bank and credit card transactions automatically into the software. That saves me time because I don’t have to input the data manually each month.

If you automatically download transactions you should be able to track your spending in less than 30 minutes a month – and that includes reconciling your accounts. That’s a lot of peace of mind in exchange for very little time Pilgrim.

6. Tickler System

You can easily automate a great deal of your financial life but not everything. Investment reviews and estate planning are two such items that really don’t lend themselves to automation.  That’s why I use a tickler system.

I have an electronic calendar that reminds me to review my investments and estate plan periodically. I can set this up years in advance if I so desire.

What I love about this is that I don’t have to remember to do anything – I get an automatic reminder to take care of business when it’s time to do so.

7. Scheduling Implementation

If you already do the items I mentioned above, you won’t need this last tip. But if some or all of this is new, you’ll need an implementation schedule.

There is a lot of information I just shared with you. It will take a little time to implement everything.

No worries. Just take out a calendar and write down when you are going to put these tips into practice.

Rather than getting frustrated by the “complexity” of simplifying your financial life, break these tasks down and schedule time to implement one item this each week.

I’ve found that by simplifying my financial life using the steps above, I have a lot more time to do the things I really want to do.

Also, I have much more control over my finances and I end up making better investment decisions too.

Is your financial life as simplified as it could be? How do you know? Do you think any of these ideas would be helpful? What else might work?

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Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
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