Simplifying Your Financial Life

After work, commuting, eating, sleeping, and/or exercise, many people have less than five hours on a typical weekday to manage everything in their life, including personal finances. Weekends are even more hectic with household chores and family activities. 

How do you take charge of your finances when time is at a premium? With “low-maintenance” strategies to simplify financial tasks and investment decision-making.  

Below are 13 time-saving financial management strategies:

Automate Everything You Can- Consider automated bill-paying for insurance premiums and utility service (e.g., phone, electric, water) and other recurring bills and automated deposits into saving and investment accounts.

 

Invest Automatically at Work- Participate in a tax-deferred employer retirement plan (e.g. 401(k), 403(b), 457, or TSP).  Contribute as much as you can afford and increase your contribution whenever you receive a raise.

 

Consider a Target-Date Fund (TDF)- Look for mutual funds with a future date in their title, such as “2040 Fund.” TTDFs use a retirement age-based asset allocation and automatically becomes more conservative as you get older.

 

Consider an Index Fund- Index funds are well-diversified portfolios of stocks, bonds, and other investments that track a major market benchmark index such as the Standard and Poor’s 500. Fund managers select fund securities.

 

Reinvest Automatically- Choose the option to automatically reinvest mutual fund and DRIP stock dividends and capital gains into additional shares instead of taking a cash distribution.

 

Set Up Holding Accounts- Plan proactively for periodic household expenses, such a property taxes and water bills, by dividing the annual cost by 12 and setting that amount aside monthly in savings until the bill comes due.

 

Make Payments Less Frequently- Pay insurance premiums annually or semi-annually instead of quarterly or monthly.  Not only will you write fewer checks but you’ll also save money on service charges and postage.

 

Get Organized- Invest a few hours to set up an organized filing system so you can find things when you need them and have a place to put tax receipts and important family records. Also complete a digital assets inventory.

 

Handle Mail Once- File, shred, or act on (e.g., pay bills) mail, including financial documents, as soon as it arrives instead of laying it aside in piles and having to re-read them.

 

Reduce Junk Mail- Lessen the volume of “financial junk mail” you receive by contacting the Direct Marketing Association (DMA) at www.DMAchoice to request that your name be removed from mailing lists. For more information about stopping junk mail, see https://www.consumer.ftc.gov/articles/how-stop-junk-mail.

 

Use Customized Financial Templates- Create Microsoft Excel spreadsheets to track your finances or use the templates for net worth, asset allocation, and spending plan (budget) calculations found in the “Resources” section of the Rutgers Cooperative Extension website https://njaes.rutgers.edu/money/. Simply insert your personal data into the template files, which contain all the required formulas. One you enter initial data, updates will be quick and easy.

 

Use Digital Money Management Tools- Consider using software programs or apps or financial record-keeping.  There’s a learning curve, of course, and time required for data entry but, over the long term, many users praise their ability to manipulate data and prepare customized reports.

 

Designate a Day- Select one day a year as your personal “financial planning day.” Just do it.  Calculate your net worth and cash flow, check your credit report, add up tax receipts, and review your will, insurance policies, and investment performance. Many people do this during the winter when they are stuck indoors and tax records start arriving.

 This post provides general personal finance information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.