How To Simplify Your Finances To Reduce Stress
ne of the biggest hindrances to living the simple life, for many people, is their finances. From being in debt to never knowing when your bills are due, there are a lot of financial issues that can leave you feeling stressed and keep your life more complicated than it really needs to be. So, if you’re serious about living the simple life, it might be time to simplify your finances and reduce your stress.
Consolidate Your Accounts
If you have a lot of different bank accounts, you may find that it’s difficult to work out which salary should be paid into which account or which bills are coming out of which account. If that’s the case, one of the simplest things you can do to simplify your finances is to consolidate your accounts. This could be so that you only have one current account and one savings account. It should make keeping track of your money much simpler.
Automate Whatever You Can
If you frequently get stressed out because you’ve forgotten to pay the internet bill on time or you’ve received charges for missing a credit card payment, it’s time to automate as many of your financial transactions as you can. If you want to live the simple life, direct debits and standing orders are your best friends. They’ll ensure that everything gets paid when it needs to and you won’t have to worry about remembering every little thing. Make a list of the payments you make manually and set them up to be paid as direct debit or standing order on dates that make sense to you. One less thing to think about.
Debt is a huge source of stress for a lot of people. If you have a lot of debt in a lot of different places, it can be even more difficult to juggle your payments. Working out which credit card will give you the lowest amount of interest, making transfers and so on can be overwhelming, particularity if you are not really financially savvy. If that sounds familiar to you, you may want to look into taking out a loan to consolidate your debts into one manageable payment. Before you do that, be sure to do your research on secured loans vs unsecured loans, the best interest rates etc. The more research you do, the less stress dealing with debt will be.
Create an Emergency Fund
Another way to reduce stress in relation to your finances, is to have a pot of money set aside for those times when you need it unexpectedly. Expensive school trips, vets bills or car repairs are examples of payments that are outside of your usual monthly budget and therefore might cause worry if the funds aren’t available. Having money set aside is a great way to ensure that you never have to stress about the financial side of life. This leaves you free to focus on the stuff that matters. The more you can set aside the better, but if you can build up to having the equivalent of 6 months’ salary in savings, that will really help.
Create a Budget
Creating a budget might seem like a lot of effort. However once you have a budget and you know exactly what you have coming in and out each month, you don’t really have to think much at all about your finances from day to day. Remember you have both fixed and variable costs each month. Total your monthly income and expenses. If your end result shows more income than expenses, you are off to a good start. This means you can prioritize this excess to areas of your budget such as paying your debts or setting up savings. If you have higher expenses than income, it means some changes will have to be made.
Simple living and organised finances go hand in hand, so be sure to work on simplifying yours today. Which area will you start with?