5 Basic Ways To Simplify Money Management

By | 2011/01/06

A simple financial life, will help you manage your money better. So it is important a person undertands how to keep money management simple. If your financial life gets overwhelming and confusing with accounts, credit cards and bills – then its about time to simplify it.

Here are 5 basic ways to simplify money management:

Use Cash

The primary step towards simplifying your money management is reducing your credit card usage. An average American carries between 4 to 6 credit cards with him. It is not very favorable to use credit cards in practice as such. Try to be more cash oriented while making purchases. You can still use our credit cards occasionally for few items but it is not cool if you charge every single thing on it.

Budget using pen & paper

If you ever sit down to budget using pen and paper you would realize that your budget is pretty complex. And that will be your first step towards simplifying money management. It is something that no computer software can help you with. Also, a budget made with pen and paper will always be more easily accessible for you to consult and stick to.

Minimize Bank Accounts

Be very frugal with maintaining your number of bank accounts. So many people open up a lot of bank accounts – more than they need. I doubt if anyone need 2 savings, 4 checking, and 3 separate retirement accounts. Having a lot of bank accounts can be distracting and you forget about many accounts (believe me, its true), so you end up wrongly assessing your net worth. And if you don’t know how much money you have in the bank – you can never plan your finances properly.

Write Down Your Possesions

Okay, this can be a pretty arduous task but, it is worth it. How? Well, when you know what all you own and what you have with you – it will give you a good idea whether you require anything more. It will basically allow your mind the clarity of thought to know what junk is piling up.

Start Filing

Does your cupboard burst at the seams with all the payment bills and invoices? Then its about time to start filing. Filing is a very important activity to simplify your money management ritual. Use different folders to sort various types of paperwork like receipts, bills, documents to shred, documents to file, and so on, until you can process them.

The basic aim of this post is to help you declutter so that it allows you a crystal clear picture of your finances. Further on, you will automatically find that your money management troubles are simplified.

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