Last time you had it simple, you were probably year 4 in primary school and I’m guessing life has become a lot more complicated since then. The modern world does not make simple living easy; now, more than ever, we are being told that we should be doing more, earning more, owning more.
Miss the simple life (and primary school afternoon nap sessions)? Me too, so let’s do something about it (although I can’t help with the nap sessions, I’m afraid; talk to your boss about that one).
Our finances often bring complexity to our lives, so let’s start there, with a few tips to get “simple” back:
1. Pay cash.
Swap plastic for cash and you’ll see how much easier it is to keep track of your finances. I can’t be the only one who feels like, because I’m not actually handing anything over, I’m not spending “real” money when I use my card. This especially applies to credit cards: swiping them is a doddle, but making timely payments on all your cards often isn’t. Pay in cash and it’s done.
2. Consolidate accounts.
If you like using credit cards, then have as few as possible. I know, I know, they keep offering you rewards to open new accounts! Then, all of a sudden, you feel like you’re Beyoncé and can spend what you like. Chances are you’re not, and you can’t. It’s harder to manage and keep track of multiple cards and easier to overspend. Instead, limit yourself to a couple of accounts and find the best credit card for you. Pick one for everyday spending and rewards, and another with low interest for balance transfers.
Pro tip: If you have opened several accounts, to preserve your credit score it is advisable not to close them immediately after paying them off. Cut up your card but keep the account open for a while. This spreads out the decrease in your total available credit which is less damaging than a sudden, large reduction.
Anyone else “file” bills by shoving them in an overflowing drawer, to deal with later, and then promptly forget all about them? That was me until I set up auto-payments. This is perfect for recurring bills like your mortgage, car payment, credit card charges or gym membership and you’ll never miss one by mistake (not a fun experience). You can also automate your savings with online banking, choosing an amount to transfer to your savings account every month. The result: less things to think about, or forget, which is always a winner.
4. Go paperless.
It’s easy for letters and statements to get lost in the myriad of other crap, for want of a better word, which we’re sent every day. Also, if you receive them by post then you have to file them (not in the aforementioned overflowing drawer), becoming surrounded by more “stuff”. A simpler way is to register for electronic billing and receive your bills and statements by email. Bonus: you save some trees, too.
To deal with the contents of that drawer I keep mentioning, simply scan all of your documents so you have copies and then shred everything you don’t need (except for important documents such as certificates and titles). There are plenty of tools to help you organise your paperless finances and store them safely on your computer, the cloud or another platform.
5. Own less.
A juicer lived on my kitchen worktop for two years before I was forced to sell it because, to be honest, I don’t like juice and had only used it once. It’s easy to overbuy in our consumer society where we are constantly being told that we “need” more things. Have you found your “enough” yet? The more you have, the more time you have to spend maintaining and organising it (and trying to justify its existence when you have only used it once…). In many ways, less is more. Build a healthy relationship with your wallet, save a quid whenever possible and spend on experiences and things that really matter.
6. Close old accounts.
Banks seem to feel the need to send you letters and statements informing you about how much is in your account even when the answer is £0 and it has been for several years. That’s not fun for anyone. If you’re not using an account and are not intending to, close it and save everyone some hassle.
7. Pay Off Debt.
Instead of letting it mount up, pay off debt as soon as you can, even if it means you have to tighten the purse-strings for a while. This may seem obvious (hey, I never said this was rocket science!) but you would be amazed at the number of people who keep sinking further and further into debt, often in pursuit of a certain type of lifestyle. Try not to live beyond your means as that is definitely not the route to a simpler life. Again, you’re not Beyoncé.
8. Take Advantage of Technology.
For better control over your finances, sign up for Bean. Yes, this is a shameless self-plug but, as the purpose of Bean is to help you simplify your financial life, and save you time and money, it would have been a crime not to include it!