Simplify your finances in six easy steps

Trust me, I know how unappealing the thought of getting financially organised is. It’s seems complicated, and let’s be frank – when where we expected to know what to do! No-one teaches this in school (well they didn’t in my day anyway). But it doesn’t have to be awful, with a few little steps, you can get yourself into a really good position (quickly), which will make a world of difference.

Use tools

There’s no need to sit down with a cup of coffee, a notepad, pen and calculator anymore when it comes to financial management. You don’t have to remember everything you need to do, there are a load of (often free) tools and apps out there for you to use, which makes everything incredibly simple.

One of my favourite apps is Ontrees (from MoneySuperMarket) which is a free app that lets you put all your bank accounts in one place, so you can see what’s coming in, and what’s going out – and here’s the nifty bit, splits your spending into categories such as restaurants, groceries and household bills.

Update: 23/07/2019 – Ontrees closed on April 4th, 2018. Details here.

Another app that is particularly useful, especially if you have debt (who doesn’t? Taking into account mortgages/student loans etc) is Debt Manager, which is currently £1.49. It helps you organise, track and pay off all your debts in the cheapest and fastest possible way using the “debt snowball” method. It’s good for those who like to see progress!

If possible, ensure you have enough funds in your account and automate everything with direct debits if possible, so the work you have to do is minimal. Set up weekly withdrawals from your current account to you ISA, saving account – as well as a separate emergency fund account.

Empty your wallet

There is temptation everywhere, so if there is nothing in your wallet that could pay for that temptation, it’s easier to pass it by. Reduce the amount of plastic in your wallet.

If you’re collecting airmiles/cashback etc – get a plan, only spend on one card at a time, and leave the other one at home. Or just spend agree to use the rewards for only purchases over a certain amount. You want to keep what is in your wallet as simple as possible.

If you can do it, consider only keeping cash in your wallet. Figure out what you can spend that week, take it out in cash, and that’s all there is to spend. You can see exactly what you have spent, and more importantly – what’s left.

Tear up your budget

Is your current budget working for you (if it is, woah there… not ripping up needed). However, if it’s over complicated, start again and make it as simple as possible.

You don’t need any bells and whistles, you’re budget comes down to one single thing. After all your bills and expenses (included travel, rent, food, savings etc), what do you have left? THAT – is what you have to spend on fun stuff (booze, cinema, clothes, Netflix etc).

The amount of money you have probably isn’t that big (and if it is – you should probably be saving more!), so planning how you spend that shouldn’t be too complicated. Consider taking out that amount in cash, so you know exactly what you have to spend on fun things.

Reassess quarterly

Every three months or so (more if you’ve slipped), sit down and figure out where you are financially. How much have you saved? How much could you save? Are you paying enough off your debts? Could you switch bank accounts and get a better deal? Could you trim unnecessary subscriptions? How’s your credit rating looking?

Check if you’re progressing and meeting your yearly goal – and rejig you’re quarterly plan.

Declutter

I’m personally bad for this – but I do have three stuffed draws of paperwork. Anything I thought may come in useful at some point (and things I thought I’d read later), just get shoved in there. Keeping a load of financial paperwork that’s out of date and useless is no good – simplify and get rid of everything you don’t actually need.

Once you’re done and have minimal paperwork (scan what you actually need and save on a secure file!), sign up for electronic statements on your accounts.

Protect yourself

Don’t roll your eyes at me, you need to make sure your details are safe because there are people out there who will steal your identity in a second.

If your password is 1) 12345 2) qwerty 3) your pet or 4) your date of birth, have a word with yourself. Come on… you can do better than that! Consider getting an app which will manage all your passwords such as Dashlane which is free.

Have you got any quick tricks that have made a world of difference to your financial management? Let me know!

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