Simplify Budget: Streamlining Your Finances for Stress-Free Money Management
Streamlining your finances is the first step you should take if you need to alleviate financial stress. The process involves condensing your bills, keeping track of your income and expenses, and relieving yourself of some burdens.
Tips to Simplify Your Budget
The following are several tips that can help you simplify your budget and improve your money management:
1. Get Rid of Unnecessary Credit Cards
One step toward getting control of your finances is eliminating unnecessary credit cards. Two or three credit cards are typically more than enough for any debtor to manage. The goal of having this type of credit is to show your level of debt-handling responsibility to improve your credit score and earn more significant borrowing potential over time. You can accomplish that with one respectable credit card company.
You can clean up your finances by cutting down the number of cards to no more than three. Request that your creditors close the cards you don't use and have them close the other cards once you pay them off.
2. Use Auto-Pay Services
Auto-pay is a feature that many creditors offer to their borrowers to keep their financial situations more organized. It works by taking their monthly payments from a checking account the borrower sets up.
Auto-pay can be highly beneficial to you if you decide to use it. It can save you money if you sign up to use it for bills, such as car insurance or cable. Some providers offer discounts on their services for clients who use auto-pay. At the very least, it will allow you to focus on other things and have your bills paid in a stress-free manner.
3. Downsize Your Bank Accounts
Having too many bank accounts can be just as detrimental to your financial health as having too many credit cards. Thus, you might also need to reduce the number of those. A good rule-of-thumb practice is to have three bank accounts, and one could be for bill payments and the other for savings.
You may also want to have one bank account you use regularly for personal items and necessities. Having over three bank accounts is likely overkill and will disorganize your finances.
4. Consolidate Some Accounts
Debt consolidation is a great way to streamline finances and organize debts. You can use one of three processes to consolidate your debts. Debt consolidation loans are a classic solution. However, obtaining one requires you to have a high enough credit score to qualify. The alternative strategy of signing up for a debt management plan or DMP may be a better option for you if your credit score is on the low end of the spectrum.
This method will require you to sign up for services with a debt management company. A credit counselor may provide you with services such as negotiations and creditor settlement requests. An effective DMP will allow you to pay all your bills in one lump-sum payment and have the credit counselor distribute the funds to your creditors. That process will remove a lot of the stress from your life.
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5. Use Direct Deposit
Many employers offer direct deposit services to their employees so they can get their checks electronically. It saves time and money for each employee, so they don't have to go to the bank and cash a paper check. It also cuts down on the cost and usage of paper, which indirectly helps the environment.
One beneficial feature of direct deposit is that you can send a portion of your checks to different accounts. Thus, you can send all of your bill money to the account you've assigned for your bill payments. Your savings can go to a different account, and you may have a third account for making personal purchases.
Another perk of using direct deposit is that it sometimes allows employees to receive their paychecks approximately two days earlier than usual. Therefore, if the feature appeals to you, you may want to consider this method.
6. Create a Savings Plan
To simplify your budget, you'll want to create a savings plan. Your plan should be viable, meaning you need to look at your income and expenses to figure out how much disposable income you have.
Be realistic in your calculations about how much you need for necessities and household items. That will make it much simpler to stick with your savings plan. You can then set your direct deposit preferences so that the savings funds will go directly into an account you have for funds you intend to accumulate.
7. Separate Your Income
It would be a good idea to separate your income and route it to different bank accounts. For example, you can use some of your income to pay your bills, some for savings, and some for personal expenses. That quick process will keep your finances organized and prevent you from dipping into the wrong money pot when purchasing something you desire.
8. Take Advantage of Money Management Apps
Money management apps can assist you by giving you a crystal-clear view of your financial situation. They can also handle most of the calculations you'd otherwise have to perform yourself. Another way such applications can help you is by educating you on savings and debt. Some applications can even assist you with finding lenders and other financial service providers they have in their networks.
Goalry is a site that helps debtors meet their financial goals, keep track of their finances, and find services and educational materials if they need to learn more.
The Goalry site is set up like a mall where visitors can visit different "floors" and "stores" to find the services they need. For example, you may want to visit the Budgetry "store" to learn more about budgeting and get help with creating a plan that works well for you.
It costs nothing to get an access key, and you are free to go wherever you need the most assistance. Goalry is not a lender, but utilizing the site can connect you with products and services that can improve your financial profile in many ways.
9. Create a Budget
Budgeting is a lengthy process, and it's one you can't forgo. You'll need to create a budget with your funds and then figure out how to fit your expenses into the plan. If that means you have to slice your bills in numerous areas, you'll need to commit to doing that.
For example, if you only earn $500 a week, that's all you have to spend. You can't have $600 in bills if you can only make $500 appear. Therefore, you'll need to seek solutions to bring those expenses down to where you can afford them. That might mean that you have to contact all these billing companies and work something out with each of them to improve your situation.
10. Pay Yourself First
One of the most effective actions you can take to simplify budget efforts is to pay yourself money before you pay anyone else. Put money into your own pocket for savings or personal items before you pay your creditors. Many debtors make the mistake of putting all their money towards their bill payments and leaving themselves with nothing to live on.
Doing that is a huge mistake that can leave you searching for additional funds each pay cycle. Use this small tip to better your situation and keep money in your pocket at all times.
In Conclusion
Those are a few steps you can take if you want to better your financial situation. Use the tips mentioned above, and you will most likely think of additional ones to help you. Also, check out the Goalry site for other resources to help you thrive.