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How Simplifying Your Money Can Simplify Your Life

Melissa Ternes April 2020

Money Kuel Category Expert: Melissa Ternes

What is Money Simplicity?

Some think that money simplicity means minimalism. For others, it’s about being uncomplicated and having the resources available to make choices based on preference not price. And still, for others it is being ultra-frugal with their money, living on cash only, and never going into debt or having credit cards. Bottom line, it’s personal.

Now, before you say it, I’m not talking about giving up everything to live a life of deprivation. I am suggesting that by being highly intentional in your daily financial decisions, you can increase the odds that what is in your life is truly making your life better.

I’d like to frame it in a way that is helpful and will give you more peace around money. For me, money simplicity has more to do with being willing to live in a state of ease. I know when I’m out of balance with money because things get hard, complicated and worrisome. The beauty of money is that it can be the mirror for what is going on in other areas of your life.

The process of simplifying helped me learn how to pay attention to what really matters to me and what does not.  It eased overwhelm and reduced the amount of time it takes to manage money on a monthly basis. Simplifying means you have less to take care of, fewer accounts to manage, fewer bills in the mail.

This is true not only of things, but for anything that takes up unwanted space in your life, think toxic relationships, jobs you hate and other things that aren’t making your life better. The truth is all of those impact your money in one way or another.

Here are 7 easy steps to create Money Simplicity in your life

Simplify in these small incremental steps. It’s a good idea to prioritize in a way that makes sense for your situation. Don’t try to do everything – or start everything – at once. Taking a small step everyday will get you further than trying to do it all, getting overwhelmed and quitting.

  1. Consolidate Accounts: Do you have multiple checking, 401k, retirement, investment or other financial accounts at various banks and institutions? Consolidating to one or two makes life so much easier.
  2. Use Two Bank Accounts: One for auto draft and one for spending. Put the paying bills money in the auto draft account and the spending money in another account. This way if you are one to check your bank balance to see what’s available you remove the worries of being overdrawn.
  3. Reduce the Number of Credit Cards You Use: This keeps it simple at bill paying time and makes it easier to pay attention to your spending habits. NOTE: you don’t need to close the accounts, just use fewer and make them your regulars. Closing credit card accounts can negatively impact your credit score.
  4. Use Cash or Gift Cards: For areas that tend to be places of overspending, get a gift card to easily track spending without needing a budget (because they don’t work anyway). This is the perfect way to manage an Amazon habit.
  5. Use Old Money: Start saving to cover bills in advance. It’s great to have money left from last month to pay this month’s bills.
  6. Identify the Intersection of Important and Happy: Ask, “is this thing more important than the money, time or space it takes up?” If the answer is no, you are on your way to getting rid of a layer of clutter and getting closer to really enjoying the things you have.
  7. Track Your Net Worth: Net worth is the indicator of how well you are doing financially. This is the most important financial number to know and the one that matters most. It is simply what you own minus what you owe.

I simplified my financial accounts, my daily processes and even my own expectations for myself. Simplicity, I am learning, is not a destination to arrive at, but a journey.  I am still learning and will always be learning. As you walk the path to simplicity be gentle with yourself. Here’s to simplifying your money!

 

About the Author:

Melissa Ternes is a financial empowerment coach, author, serial entrepreneur, wife, dog mom and lover of travel. Melissa is based in Raleigh, North Carolina and when she’s not out speaking or teaching, she’s seeking an adventure on the “pretty blue water” of Belize with her husband and adventure companion, Wayne. You can connect with Melissa on LinkedIn and check-out her website at Master Your Money Now.