Most of us would love to simplify our lives. It seems as though we’re always on the go, whether it’s the result of work or family responsibilities, appointments, or taking care of our homes. Life sometimes appears overwhelming and feels like it’s spinning out of control.

While handling all of our personal twists and turns, one of the most important - if not the most important - parts of life is money.  While money certainly should never come to define us, it’s quite important - especially if you have a family. Finding ways to manage your money efficiently benefits not only those you love but also your own ability to handle the day-to-day hectic nature of things.

As life evolves, finances become increasingly complex. Most of us get married or enter into long-term relationships, we start new careers, children often enter the picture, and we invest in homes. Our financial accounts accordingly become more complex. Today’s financial planners estimate that the average person juggles roughly 15 financial statements:

  • Bank Accounts

  • Investments

  • Insurances

  • Credit Cards

  • even Shopping Sites (such as Amazon)

It’s easy to let some or all of these accounts go unchecked at times, given everything life has to throw at us.

Sitting down at night to organize papers and data is usually the last thing a person wants to do after a busy day.  It usually leads to procrastination and, if allowed to pile up, to a degree of stress.

Streamlining your finances is one of the best things you can do, because it’s one less thing with which you’ll have to concern yourself - one essential thing. If done efficiently, you’ll reduce stress and costs, you’ll know where everything is, and you’ll have a working knowledge of the basics of your monthly budget.

What you need first is, however, a game plan - and the name of that game is consolidation and concentrating on the basics.

Invest the Time

Money is not the only thing we invest in something. We also invest our time.

In this case, putting some time into bringing all of your finances into a single, orderly, personal financial system will be enormously beneficial. Once you complete the project, you’ll find yourself with a lot more time to handle life’s responsibilities. 

It’s well worth the effort.

Streamlining your finances - concentrating on the basics - should at least take into account some (or all) of the following ideas.

The Use of Technology and Automation

The ultimate goal of setting up your financial system is not to give it much thought and to have to do less. You’ll want to give things a check once a month to make sure everything looks good, and perhaps a twice-a-year, more significant assessment to see if you should make any adjustments, but the endgame is to have a system that pretty much works on its own.

To that end, make use of your bank’s technology. It can make life a whole lot easier.

  • Set up online banking/automatic payment for recurring monthly bills.

  • If you have investments, you can also set up those accounts to deduct money directly from your bank accounts.

  • Place any miscellaneous expenses on a credit card and pay off in full at the end of each month. If the card has a great points and rewards program, even better.

Putting automation to use allows you to visit your accounts on the bank’s website and to see where your money is going, what you’re spending per month, and possibly to download all the data into a bookkeeping program such as Quicken. This will analyze your spending over time - something that will make those twice-a-year assessments a whole lot easier to digest.

Consolidate Accounts

By the time some people have reached their early-to-mid 40’s, they have too many financial accounts to juggle and too many investments. In fact, financial planners say that a lot of young people often “over-diversify” early in their careers, thinking that they’re doing the right thing. 

Some even switch careers and often have multiple retirement accounts from different employers.

Does a person need, say, five retirement accounts?

Some 10 or 15 years later, however, they have an unnecessarily complicated mess on their hands. They didn’t properly monitor all of them, and they’re even paying extra, pretty high fees to maintain them.

The answer? Consolidate as many of your accounts under as few umbrellas as possible. The goal is to be able to manage things at a glance, if necessary.

For example, consider the following:

  • Your checking account is at the same bank as your mortgage: Checks should be free with either zero or a minimum required account balance.

  • All your investments are with one broker: You should have access to free checking, no annual fees, and a host of other benefits.

  • You have multiple accounts with a single institution: Link all statements, so you only need to log in once to see the overview of your finances.

  • Consolidate multiple credit cards: Transfer all balances onto a single card with a low APR and a reliable rewards program.

Search for Better Deals

If you’re going to sit down for that twice-a-year, big-picture assessment, that might be a good time to consider changing some accounts if you can get better deals elsewhere. Remember, the foundation of capitalism is competition, which always reduces the cost to the consumer.

Insurance

Most people take their insurances for granted and pay too much for the coverage they receive. There are simple ways around this.

  • Compare premiums and coverage limits from different insurers

  • Take out multiple policies with the same insurer to reduce fees and save on premiums

  • Increase your deductibles to reduce monthly premiums

You’ll most likely end up with lower costs and improvements in coverage.

Credit Cards

The most important thing to remember about maintaining debt on a credit card is that the monthly payments and interest rates eat into your primary source of wealth - your income.

That said, there are several things to consider if you’re going to use your card most efficiently. Different cards have different programs and benefits.

  • Better rewards for certain types of spending

  • Most have an annual limit on the amount of rewards

  • Most have different fees and interest rates

However you go about choosing the card that’s right for you, be sure to manage any spending to get the most out of the potential benefits:

  • You can max out the year’s rewards on a card with a generous program, then switch to another card.

  • Make sure that the rewards exceed your costs - service fees, interest rates, etc.

  • If you use your card a lot, you’re better off with a card that charges higher fees - you’ll get greater rewards.

  • If you charge less, you’re better off with a card that has lower costs  - the rewards program won’t be as important.

Financial Firms

Should you at some point choose to work with a professional financial planner, be aware that the financial firms have a vested interest in keeping you around and having you continue to place portions of your wealth with them. We’ve pointed out that many people have too many financial accounts to manage efficiently. While that’s not good for you, it’s just good business for these firms. They want to keep you moving in the same direction.

Financial firms typically do two things of which you should be aware:

  • They’ll initially offer excellent deals with great benefits to try to grab your business.

  • Over time, they’ll either gradually reduce the benefits or fail to keep up with what other firms are offering.

This is one of the reasons to look occasionally at the bigger-picture assessment of your finances. In a case like this, you can either approach your financial planner and ask for better terms or inform him that you’re going to explore other options.

Centralize All Financial Information

Once you’ve taken account of and streamlined all your finances, consolidate all information into one location. Everything should be quickly at your fingertips.

You can organize by any of the following:

  • Banks

  • Financial firms

  • Investment accounts

  • Retirement accounts

  • Life insurance accounts

For each, be sure to write down the institution’s name, the account number, and the username and password. Keep everything in either a physical notebook or file folder or in a file on your computer.

Save Your Money, and Save Your Time

In the end, taking these steps will result in your having more time to devote to other important things. Your finances will require less hands-on management, they’ll be far more efficient, and you’ll be less stressed. Taking the time to set things up, for a brief monthly check-up, and to assess the bigger picture twice a year - to determine what’s working and what isn’t and what, if any, adjustments can be made - will provide enormous dividends. 

Your time is valuable. Invest it in the areas of your life that really matter.