Last Updated on October 7, 2021 by Rebecca
Simplify Finances to Save Money
Want to simplify finances so you can stop stressing about money?
Sixty percent of Americans report feeling anxiety when thinking about their finances. And women are more likely to worry about money than men.
Some of the most common sources of money stress include:
- High interest debt
- Not enough savings
- Low income
- Rising prices (i.e. inflation)
- Increasing cost of living
It’s enough to make you lose sleep at night. But finding ways to simplify finances can help.
Taking a “less is more” approach to your finances can save you time, energy and money headaches.
That doesn’t mean you can go hands-off with managing money. But you can adopt some strategies that are used by money minimalists.
Not sure where to start with streamlining your financial life?
Today I’m sharing my best tips to help you simplify finances and banish money headaches for good.
How to Simplify Finances in 10 Easy Steps
I’m all about taking the easy route when it comes to money.
So these 10 tips are designed to help you simplify finances as painlessly as possible.
1. Automate bill payments
Want to know the secret for how to simplify bill paying?
Schedule your bills to be paid automatically.
Putting your bills on autopilot does a couple of things for you.
First, it helps you avoid paying bills late.
Late payments are a pain because you can get hit with a late fee when you don’t pay on time. Even worse, a late payment to a credit card or loan could hurt your credit.
A good credit score matters if you need to borrow money. You don’t want to get denied for credit or end up stuck with a higher interest rate.
The other benefit of putting your bills on autopilot is that you don’t have to worry about them.
How much easier is it to know your bills are paid each month?
If you have direct deposit set up with your bank, you can get paid and know that the bills are covered. Easy peasy!
Pro tip: Keep a buffer in your checking account.
Having a little cushion means you don’t have to run the risk of triggering overdraft fees. So consider keeping the equivalent of one paycheck in checking as a buffer.
2. Automate savings
More than half of Americans (51%) say they can’t cover three months’ worth of expenses with savings.
The saving money struggle is real for a lot of people but it doesn’t have to be.
Just like with bill paying, automating savings is another easy way to simplify finances.
When deposits to savings are automatic, you know the money you want to save is going to get where it needs to go.
You’re a lot less likely to spend the money you planned to save if it’s coming out of your checking account automatically every payday and going straight into savings.
You can automate your retirement and college savings too.
Since I’m self-employed, I don’t have a company 401(k) I can use to save. Instead, I park my retirement savings in a SEP IRA.
I make regular deposits automatically each month to my account, and I bump up my savings with extra deposits every few months through the year. I do the same with the 529 accounts I’m using to save for college for my kids.
The great thing about automating your savings is that even small amounts of money add up over time.
If you have to start with a $10 automatic transfer from checking to savings once a week, that’s fine. You can work on raising that amount gradually and in the meantime, you’re growing your savings cushion.
Not sure where to keep your automatic savings?
A high yield savings account is a good place to start. You can earn a great APY on your money with minimal fees.
And if you want to invest your spare change, you can try an app like Acorns.
Acorns rounds up your spare change and invests it in low-fee ETFs. You can build wealth automatically with pennies a day!
3. Track your spending
Need some ideas on how to simplify your budget?
The answer is tracking your spending.
When you track spending, you can simplify finances and budgeting because you know where your money is going.
Tracking your spending is important if you want your budget to not be a total failure.
A budget is really just a plan for managing your money and it has two sides: the money coming in and the money going out.
When you’re conscious of what’s going out, it’s a lot easier to stay on budget. And you can find potential budget leaks that might be money wasters.
There are a few ways you can track your spending but I think the easiest way to do it is to let an app do it for you.
You link your checking account and credit cards to the app; the app records your spending so you can see at a glance where your money went. Easy peasy and all you have to handle is the initial account set up.
Personal Capital is a great choice for a budgeting app to simplify finances.
It’s free to use and you can see all of your financial accounts in one place. It’s finances simplified, which is great if you like managing your money on the go.
4. Use banking alerts
If you’re not using banking alerts to simplify finances, you are TOTALLY missing out.
Alerts can tell you exactly what’s happening with your money without ever having to log in to your account.
You can set up banking alerts for:
- Low balance
- New debit transactions
- New credit transactions
- Bill payments that have posted
- Bill payment due date reminders
- Transfers between accounts
- Login attempts
If you use a credit card for spending, you can sign up for high balance alerts as well.
This way, you know how close you’re getting to your credit limit. You can also set up credit card alerts to let you know every time there’s a new charge on your account.
Having these alerts in place can help with tracking spending and security.
And you can also sign up for free credit monitoring alerts to detect any suspicious activity on your credit card accounts.
5. Go paperless
Paper clutter can make you feel overwhelmed. Not to mention it’s easy to lose track of financial documents if you don’t have a solid system for keeping them organized.
So what’s the easy solution?
Simplify finances by going paperless.
Some of the things you can go paperless for include:
- Bank statements
- Household bills (i.e. mortgage statements, utility bills, insurance bills, etc.)
- Investment statements
- Student loan statements
- Credit card bills
- Insurance ID cards
Switching from a physical paper trail to a digital one is one of the best ways to simplify money management.
It’s so much easier to check statements or bills online than it is to manage a mountain of paperwork.
And you’ll feel good about wasting less time and less paper to manage my money.
6. Consolidate accounts
If you’ve got accounts scattered here, there and everywhere, you could just be making it harder on yourself to stay on top of your money.
Moving all your money to just one bank can simplify finances and the job of keeping tabs on your balances.
If you’ve got a checking account and a savings account, you’ve got the two basic tools you need to manage your money.
Before moving all your money to one bank, do your homework first. Look at:
- The kind of accounts the bank offers
- Any fees you’ll pay for checking or savings accounts
- What kind of perks and features you get with your account
- The interest rate you can earn on savings
- ATM locations and how conveniently you’ll be able to get to your money
- Customer service and the bank’s overall reputation
If you don’t have a lot of time to spend comparing banks, try a site like MyBankTracker to review different options. (I write for them so trust me, they know their stuff when it comes to banks.)
7. Streamline credit cards
Credit cards can save you money if you’re using them to earn cash back or other rewards.
But they can quickly become your worst nightmare if you end up with a bunch of debt.
So how do you simplify finances when you have credit cards?
Try paring back the number of cards you use.
For example, you might keep one card to earn cashback. And you might have a second card for earning travel miles or points.
Sticking with one card keeps things simple. And it can help you keep your debt in check, too.
When you’re looking for a catch-all card, check out the rewards of course but also look at the fees and interest.
If your goal is to simplify your finances, the last thing you want is a card that’s only going to cost you money.
8. Eliminate unnecessary expenses
Something I’ve learned over the last few years is that it’s not the big things that blow my budget to pieces.
It’s the little things — smaller expenses that I don’t really think about — that throw my finances out of whack.
If smaller expenses are eating a hole in your budget, consider what you can cut.
For example, that might include:
- Recurring subscriptions for online video games
- Streaming movie and TV services you don’t use
- Subscriptions to magazines or newspapers you don’t read
- Monthly cloud storage service you don’t need or use
Finding these little expenses in your budget can add up to big savings over time.
If you’re struggling to find ways to cut your budget, there’s a tool that can help.
The Trim Financial Manager reviews your spending and finds your budget leaks. It helps you eliminate wasted money so you have more to save.
9. Bundle and consolidate bills
Bundling is a godsend if you want to simplify your finances and potentially save some money.
You can bundle things like your cell phone, internet and cable TV service together. And you may be able to snag discounts combining two or more services on a monthly bill.
You can also bundle things like your car insurance and homeowners or renter’s insurance.
The sweetest part about bundling (aside from the potential savings) is that you can go from having several bills to pay each month to just one.
The bundling concept can also be applied to your debt.
Combining balances onto a single card with a 0% APR using a balance transfer can help to simplify expenses.
You can cut down on the interest rate for your debts and streamline the monthly payments. It’s a win-win!
You can also use a tool like Tally to save money on credit card interest.
Tally helps you lower your credit card APR so more of your payment goes to debt each month.
10. Use a password manager
How often have you forgotten your online banking password or the password to your credit card account login?
It’s frustrating, right?
And then you change the password, only to forget it again.
Instead of trying to keep up with multiple passwords, there’s a simple way to track them all in one place.
Using a password manager is a genius way to simplify money management. You can keep all of your passwords safe and secure in one place.
If you need a simple tool for tracking passwords, try 1Password.
You can use it to store:
- Credit card numbers
- Driver’s license numbers
- Social Security numbers
- Account numbers
- Rewards program numbers
- Membership numbers
It’s an all-in-one solution for keeping track of important personal and financial information.
Final thoughts on how to simplify finances
If you want to simplify your finances, remember — it doesn’t have to be rocket science.
Just making small changes like these can make a huge difference in how you manage and relate to your money.
I’m not a financial expert but I’ve put each and every one of these tips to the test. All of them have helped me get a lot more zen about my finances and I want you to feel the same way.
What are you doing to simplify your money? Hit the comments and tell me about it.