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10 Steps to Declutter and Simplify Your Finances

by Ryan Guina

Sometimes less is more. In the world of money and finances, more is usually more. But when it comes to administration and bookkeeping, less is certainly more. These tips can help you automate and streamline your finances – reducing the time needed to stay on top of things and giving you more time to do the things that are important to you.

Handle Your Mail More Efficiently

eliminate junk mail

Are you drowning in junk mail?

The average person receives 560 pieces of junk mail each year, or about 1.5 per day. A great way to minimize the clutter is to stop junk mail and opt out of pre-screened credit offers, leaving you with the more important pieces of mail to deal with. From there set up a system that works for you. Some people find it easier to do batch processing, where they go through a week’s worth of bills and correspondence at one time, and others prefer to deal with it immediately. Experiment to find which method is best for you.

Do Not Call List.

You can also opt out of annoying phone calls by signing up for the Do Not Call List. This won’t stop phone calls from companies you currently deal with or charities, but it should stop unsolicited phone calls from mortgage brokers and debt consolidation companies.

Handle E-mail More Efficiently

Use your personal e-mail account for personal items and a dedicated e-mail account for finances and official household business. My wife and I set up a dedicated e-mail account through GMail for our finances, insurance, and online shopping accounts. We don’t use it for anything else, including communication with family and friends. Be sure to opt out of store e-mails and coupon offers as most of these are just clutter that you won’t read anyway. The result is a clean inbox with actionable items.

Go paperless

Opt to receive electronic statements, which has multiple benefits, including less mail to process and a lower environmental impact. Some companies will also waive fees if you go paperless, including Vanguard and a few others. If you prefer paper statements, then get an document scanner so you can scan the document for your records. Then shred it; reducing clutter at home.

Use Automatic Bill Pay

Most online savings accounts offer free bill pay as part of their service, and it has become very common through most brick and mortar banks as well. Set up as many bills on auto pay as possible, reducing the amount of mail you send and receive, and reducing the time you spend worrying about paying bills. You can also link some payments to your credit card each month so you can take advantage of rewards points or cash back. Only use this method if you are certain you can and will pay your bill in full each month.

Automate Your Investments

Just like paying bills, it is easier to invest when you don’t have to sit down and write a check or initiate an electronic funds transfer each month. Set your basic asset allocation and make automatic payments for your investments. This can often be done through work via 401k contributions or a payroll deduction. You can also do automatic transfers through many brokerages, investment houses, or other financial institutions. Some discount brokerages, such as ShareBuilder, offer discounts on automatic stock trades vs. real time stock trades. Be sure to go over your asset allocation every so often to maintain a balance with your investments.

Use Personal Finance Software

Managing money is much easier when you know how much is coming and going, and where it is coming from and what you are spending it on. There are many great financial management tools including You Need a Budget, Quicken, and a host of free online money management tools.

Consolidate financial accounts

It’s not uncommon for people to have several bank accounts, but most people can get by with a local bank and an online bank for better interest rates. Many people also have multiple retirement accounts because they change jobs often. Depending on your needs, it may be a good idea to consolidate these accounts. Find a bank with high interest interest rates and nice features and park your money there. If you have an old 401k plan you can roll it into an IRA. IRAs can also be transferred to one brokerage account for easier tracking. Here is a list of the best places to open an IRA.

Reduce the number of credit cards you carry

The average American carries between 4 and 6 credit cards. Access to easy credit can be convenient, but it can cause problems for some people. Reducing the number of credit cards you keep can reduce the amount of mail you receive and make it easier to manage your money. Just keep in mind that canceling a credit card can affect your credit score, so you should probably leave the oldest card open and make sure canceling any credit cards won’t make your credit utilization too high (amount of credit used vs. amount of available credit). Here are more tips about the affects of canceling a credit card.

Consolidate Debt

This won’t apply to everyone, but it may be a lifesaver for some. If you are making multiple credit card and other payments each month, then you might consider reducing the number of bills you receive and need to pay each month. One way to do this is by consolidating your debt. Don’t worry, you don’t need to pay a company thousands of dollars for this because you can consolidate your debt on your own. An easy way to consolidate your credit card debt is through a 0% balance transfer, which allows you to transfer your credit card balances to a new credit card at a 0% interest rate. There is usually a fee involved to do this, but it usually maxes out around 3-5%, which is much lower than the average credit card interest rate, which hovers around 20%. This tip can simplify your bill paying and save you money.

Simplify and Automate to Save Time and Money

Simplifying and automating your finances only takes a small amount of time and effort to set up and maintain and it can save you time and money by reducing clutter and wasted energy. It’s a win-win situation.

Photo credit: Night-thing


Published or updated January 31, 2013.
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{ 4 comments… read them below or add one }

1 No Debt Plan

I love automating my bills… the only problem I run into is those yearly bills like life insurance. I can’t remember if it is auto-pay (I don’t think it is), and I know they would send be a bill notice… but we haven’t gotten anything lately. Now I have to dig through our records to find the customer service number/website and track it down.

In reality it probably isn’t due until next month, but it just freaks me out that I haven’t gotten a bill yet.

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2 Broke M.B.A.

Great list Ryan.

I recently realized that I had a *few* too many savings accounts. I know I had a good reason for opening them years ago, but I just didn’t have a good reason to keep these extra accounts any longer. I agree that closing unused accounts (checking, savings, credit etc.) and consolidating them makes your life much simpler.

I’m also working on rolling over an old 401(k) from a previous employer into my current employer’s 401(k). Looking forward for this to be finished!

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3 Athar A. Khan

Mint.com is another great financial resource. I prefer Mint.com over Quicken Online (even though both Mint and Quicken are owned by Intuit Corp.).

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4 andrewbpaterson

Great list. Concise and efficiently presented. The links are quite useful, too!

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