Declutter Your Finances

Declutter Your FinancesRecently I began to tackle a project that I had been thinking about for months: re-organize and clean my home office.

It needed to be done because it was no longer a good working space. Since I work from home, this was an essential project.

I am very organized person so I tend to have everything in folders and binders, but even for me you can easily accumulate more than you need over time.

But with the summer just starting I found myself with a little time to finally tackle it. So a couple of weeks ago I spent around 4 hours just getting rid of old documents and other items that were not longer needed.

I also changed the location of my printer and my filing cabinets (optimizing space) and made some room for books that were just in a pile in a corner. Finally, I bought a new and much needed wireless keyboard.

I ended up with a much better work space. I have some more cleaning up to do, but finishing at least the first part of that project gave me a great sense of control and peace.

It also put me in a better frame of mind to work.

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Is it Time to Declutter your Finances?

When we talk about managing our personal finances, clutter can also become a part of the experience.

It is possible that you have not taken a hard look about what you are doing to manage your money in a while. It is possible that this neglect has made things more complicated and perhaps less pleasant.

And you are not in a good frame of mind to work on your finances, you progress can be hindered.

With that in mind, I want to give you a few tips that I have picked up over the years to organize and operate our financial management system.

Bill Management

We are 15 years into the 21st century and we are in the midst of the Information Age. We can use this to our advantage.

  • Go from paper to online/e-mail delivery.
    • If you are adept at using a computer and the internet, this is a great option to eliminate paper clutter in your house.
    • Most service providers give you this option. Of all our monthly bills only one comes to the house via regular mail and that’s because the service provider does not offer the electronic option. Everything else comes to us electronically.
  • Use financial management software to manage your bills and track your expenses.
    • Set monthly reminders of when bills are due. It is easy if you have a busy schedule, to forget when every bill is due. Perhaps you are used to just waiting for that bill to be delivered in the mail. Take control and set some reminders for yourself.
    • Plan when bills are going to be paid. You probably already do this in your head. For each pay cycle, you know which bills get paid. In my case, I get paid twice a month. With the 1st pay check we cover the mortgage, the cable/online bill, and our cell phones. With the 2nd pay check we cover utilities and auto insurance.
    • I have setup our money tracking software with those dates as monthly reminders to make sure that payment goes out on time.
    • By using software you can easily produce are report of you are tracking against your budget for the month.

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Online Banking

In this Information Age, we can also take advantage of online banking. Most banks and credit unions offer this option. Here is a few of the things you can do:

  • Always have access your accounts online and keep track of when payments and deposits are processed.
  • Get your monthly statements online and easily reconcile them.
  • Pay your bills via your bank and avoid delays associated with regular mail. You can also set some recurring bills to be automatically paid for you every month.
  • Easily transfer money between your accounts.
  • Most banks and credit unions also offer applications (Apps) for your smart phone so you can do everything you normally would do on your computer via your phone.

Stay in Control

One of the keys to winning with your finances is gaining control over what’s happening to your money.

You can have more influence in the outcome of your finances if you stay on top of them.

I have shared some of the tips that have helped me stay ahead of the game.

I hope they help you stay ahead of your financial management game.

Question: What steps could you take today to declutter your finances?

What Do You Need to Win with Money?

What Do You Need to Win with Money?Have you ever seen the movie the “Wizard of Oz”? It is considered an American classic and it debuted 75 years ago this year.

My wife has been participating in a local musical production of the “Wizard of Oz” as a pianist. I had the great opportunity of watching the performance last week.

In the story, young Dorothy gets swept out of her home in Kansas by a tornado and she lands in the magical Land of Oz All she wants to go is to get home and she is told only the Great Wizard of Oz can help her.

So Dorothy goes off to see the Wizard and along the way she meets 3 new friends: a Scarecrow who lacks a brain, a Tin Man who lacks a heart, and a Lion who lacks courage.

All 3 of them join Dorothy on her quest to see the Wizard in hopes he can help them as well. In the end, they all get what they need, but the Wizard had very little to do with it.

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When I think about our finances, I think we all have the same needs Dorothy and her friends did.

Let me explain:

  • We need our brain to be activated. We need to be involved with what happens with our money. We need to learn new information and we need to be wise with our financial decisions.
  • We also need our heart to be engaged. If we are going to change our financial situation, a lackadaisical approach is not going to cut it. We need to put some passion and emotion into it.
  • Finally, we need courage. Courage to make tough decisions. Courage to make sacrifices and changes in our habits. Courage to be honest with our spouses in terms of finances.

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And most of all, like Dorothy we all need to go home. What do I mean?

You need to make sure your home is well taken care of in terms of your finances.

Do not disengage. Do not abandon your spouse in the management of money. Do not neglect the future of your children.

Go home and take care of business.

Fortunately for you, just like with the Scarecrow, the Tin Man, and the Lion you already have what you need. You don’t need a Wizard.

You have what you need you to take care of what needs to be done with your money.

Get after it!

Question: What do you need today to begin to take control of your money?

Should Your Finances be on Cruise Control?

Finances on Cruise Control

Do you enjoy road trips? It is one of my favorite ways to go on vacation, and at least once a year my wife and I take such a trip.

To avoid the strain on our own vehicles, we usually rent a car. For a long road trip, one of the must-have features for that car is of course cruise control, which allows me to set the speed at a fixed amount.

On those long portions of the trip, it is nice to put something on “automatic” and out of your mind.

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The Danger of Finances on Cruise Control

In some instances, putting some elements of your finances on cruise control or “automatic” can be a good thing.

For example, if you are working on developing your savings habits, it might be a good idea to setup an auto-draft from your checking account to your savings account each month.

Or, if you want to make sure you are consistently saving for retirement or college expenses, an automatic transaction to your investment account would be a good option.

However, putting things on “cruise control” with your finances could also present a problem. That recently happened to me with our home insurance policy.

We had been with the same home insurance company for almost 20 years even through our move from Round Rock to Frisco. In all that time, I really did not have a reason to complain about coverage or service.

I also got into the habit of receiving the annual policy renewal letter on-line as opposed to receiving the paper version.

So far, nothing wrong with any of that. It saved me time, it minimized the amount of paper I had to file, etc.

But here is where I ran into trouble:  Two years ago, I received the notice of renewal but I honestly gave it only a cursory review.

There was a big cost increase in the insurance premium and even though I saw it, I did not really process it.

It really did not hit me until I received a notice from my mortgage company with the corresponding increase in the monthly escrow amount.

I was a bit surprised, and of course, our monthly budget had to be adjusted. So even though we could handle the change, the fact that I had let something like that slip by me, left me with a bad taste.

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Lesson Learned: Automate Your Finances but Don’t Disengage

So what did I learn? Well, I always tell you that you have pay attention to your money in all aspects. I had to apply that lesson to myself. Again.

This past December, when I received the annual renewal policy for our home insurance, I did a more detailed review. This time there was no major increase, no major surprise.

However, I took it one step further. I decided to look for other options with insurance to see if we could do better with coverage and get more value for the cost.

I contacted a trusted insurance agent and he reviewed our needs for both home and auto insurance.

I was pleasantly surprised that I could save about $400 annually combined between our home and auto insurance premiums. All I had to do was to take the time to ask for different options.

I made the switch and I am glad I took that step. Reviewing your insurance needs is just one example of looking at your overall financial plan.

So regularly, take a moment to review what you are spending on different areas of your budget (food, internet service, phone service, etc.). Take the extra step to look for alternative options.

You may end up not changing anything, but then again, you could find savings and more bang for your buck.

Now, where is that cable bill?