6 Tips to Simplify Your Finances and Keep Good Records

Feel like your personal finances are too complicated? It's time to streamline and declutter. Laura gives tips to simplify your financial life, stay organized, and know which financial records to keep and for how long.

Laura Adams, MBA
8-minute read
Episode #532

Yes, storing sensitive information electronically means you could be hacked. However, the advantages of digital docs far outweigh the downsides, especially when you take smart precautions like password protection on your devices and external drives.

Remember that identity theft commonly occurs when thieves steal snail mail and paper containing confidential information. So, going digital can also reduce the likelihood of a thief intercepting your sensitive information.

Once you create a plan for what paper and digital documents you’ll store where, make sure your family or loved-ones know how to find important documents if you weren’t around.

5. Use Online Banking Services.

Once you’re in a routine of processing your incoming documents digitally, it’s time to focus on outgoing documents, such as your payments. I hope you’re not still buying, writing, and mailing any paper checks. Not only are they costly and time consuming to write and mail, but they can be stolen from your mailbox or at the receiving end.

Just about every large or small banking institution offers free online bill pay. You can enter any company or person and the service will send money electronically or print and mail a paper check to the payee. All you need to know is a payee’s name, mailing address, the amount you want to pay, and the date you want your payment to arrive.

For recurring bills, such as rent or a car payment, you can set up automatic payments or enter them manually every month. Many banks can request e-copies of your bills and act as a centralized hub for all your necessary payments. At a glance, you can see your pending payments and the history for each biller in your account.

If you can’t get funds directly deposited into your account, deposit paper checks remotely.

You can create customized email alerts to inform you when a bill has arrived or remind you about the due date. That’s a handy way to make sure your bills are paid on time so you eliminate late fees and boost your credit score.

Additionally, consider other transactions you can put on auto-pilot, such as transfers to savings and retirement contributions. Let technology give you a leg up so nothing falls through the cracks.

Another key banking task that you can simplify is making deposits. If you can’t get funds directly deposited into your account, deposit paper checks remotely. Most bank apps have a remote deposit feature that allows you to use a mobile device to snap a picture of the front and back of the endorsed check, and hit the deposit button. Doesn’t get any easier than that!

Be sure to never access any financial account from an open wireless network, like in a coffee shop or a library. By monitoring your account activity and setting up strong passwords that you change on a regular basis, you can reduce the likelihood of fraudulent activity.

Use a password manager, such as Roboform or LastPass, to end the vicious cycle of resetting forgotten passwords. They store and encrypt your login data and automatically fill online forms. You can try a limited number of passwords for free, but they are well worth purchasing.

See also: How to Invest Money in Your IRA or 401k Retirement Account

6. Consolidate Financial Accounts.

Having fewer financial accounts can greatly simplify your life. Consolidating makes your money easier to monitor, cuts paperwork, and reduces the paper trail at tax time.

Paring down investing, retirement, bank, and insurance companies can also cut fees and qualify you for discounts. Most people only need one checking and one savings account. If you have 401(k) and 403(b) plans at old employers, do direct rollovers to a single IRA.

Even the investments you choose inside retirement and investing accounts can be simplified. You might put all your money in the same fund family or choose a low-cost index fund or exchange-traded fund. Also consider a target-date fund, which is a type of diversified mutual fund that automatically shifts the mix of assets as you approach retirement.

Make getting financially organized a priority right now. You’ll feel more in control of your finances, eliminate expenses, and save time—so you can spend it doing something you enjoy.

See also: Are You Making Investing Too Complicated?

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlersbook is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.