The more complicated your finances are, the harder it is to keep up with everything. You'll spend more time and effort trying to manage complicated finances and the stress of dealing with your finances may cause you to procrastinate. Overly complicated finances could lead to more expensive mistakes like missing a payment or overdrafting your bank account. If you've been feeling like your finances are all over the place, there are a few things you can do to make things simple again.
Get rid of some bank accounts.
Over time, you can end up with accounts with several different banks, some you may not even use regularly. Unless you need several bank accounts to take advantage of FDIC insurance, you can afford to close extra accounts. At a minimum, you'll need one savings account, one checking account, and one brokerage account.
Closing your less-used bank accounts can also help you reduce bank fees and the amount of statements you need to read each month.
Choose one way to receive your bills.
It's difficult to keep up with bills when you receive them in several different ways - some in the mail, some email, others via notifications, or automatic subscriptions. Aim to get all your bills in the same place - either online or by physical mail. If you have a system that's working and you don't want to mess with it, create a list of expenses and the billing method so you know where to check.
And one way to pay them.
Having multiple options for paying bills can be convenient, but it can also get confusing when you're paying some bills online, some by mail, and others automatically through recurring payments. If you're not tracking your auto payments, you could end up overdrafting your bank account. Pick one or two days a month to handle all your bills.
Getting all your bills on a single payment method from the same bank account can make bill paying more efficient. As an added benefit, automating your bills can take out the stress of having to pay each month, but you must be diligent about keeping money in your account and confirming the right amount is drafted each month.
Eliminate bills you don't need.
The more expenses you have, the more complicated it gets to keep up with them all. With so many streaming services and subscription apps, you can easily end up with dozens of billers pulling money from your account each month. Many of these can be paid up for a year, so you don't have to think about them on a monthly basis. Just make sure you mark your calendar for the renewal date so you have funds available to cover the cost.
Reduce the number of credit cards you use.
You can easily rack up several credit cards as credit card issuers offers sign up bonus and promotional interest rate offers to entice new signups. The longer you hold on to these credit cards, the less valuable they become. On top of that, the more credit cards you have, the harder time you'll have deciding which one to use for your purchases.
Choose a primary and secondary card to use - ideally the ones with the best rewards - and stick to just those two cards. You'll find it much easier to keep up with your balances and avoid creating too much credit card debt.
It takes time to untangle the complications of your finances. The process could be a little frustrating, but remember you're doing the hard work now to make life easier for yourself in the future.