Managing your finances can be complex and stressful, especially while trying to keep track of all your payments and different bank accounts. However, money management doesn’t have to be as complicated as it sounds. You can make things significantly easier by streamlining your finances as much as possible using the following steps.
Consolidate bank accounts
In order to streamline your finances, you should try to limit the number of bank accounts in your name. Typically, you will need just one checking account to receive your income and pay all your expenses. In addition, you probably won’t need more than one or two savings accounts. Having more bank accounts just makes things unnecessarily complex and confusing. Therefore, closing your extra accounts is a great step to simplifying your money management.
Reduce the number of credit cards
Similarly, most people will only need one credit card and there is little to no benefit of having multiple cards. So, if you are struggling to keep track of which cards you should pay off, it may be a good idea to just limit yourself to one card. Putting all your expenses on a single credit card can help you stay on top of your expenses while minimizing the chance you miss any payments.
Automate your essential payments
By setting up automatic payments, you won’t need to remember to pay the bills at the end of the month as that will be done for you. This can prove very helpful for recurring expenses that must be paid on time every month. Automatic payments can also help you avoid the late fees that come with missed payments. Rent, mortgage, utility bills, and credit card payments are all bills that can be automated to streamline your finances. However, it should be noted that unnecessary payments such as online subscriptions or memberships are better off not being set as automatic. Also, make sure that your account has enough funds to pay all your bills.
Mutual funds simplify investing for you by offering a wide range of stocks with minimal fees. So, it is counterproductive to throw money in many different directions and invest in many mutual funds. Investors often find that doing less is more especially for newcomers. Therefore, limiting yourself to a few diverse mutual funds should be more than enough. This strategy also helps reduce the number of fees you’ll need to pay.