Handling your money effectively can feel like a burden if you don’t have the right systems worked out to handle bills and other financial issues in a timely manner.
Here are six fast, easy actions to help you manage your money, as well as free up some all-important mental space!
- Request e-statements whenever possible and pay bills immediately.Bills and paperwork that pile up are like leeches that sap your mental energy. Don’t let them pile up.
- File paperwork as soon as you get it in a system where you can retrieve it.When bills come in, you can use PayPal or online banking to pay them. Then use a customized Evernote email address to forward paid invoices from email to Evernote where you can store tax records. Use codes in the subject line of the email to automatically add tags in Evernote. For example, a subject line “#Q32015 #auto” means the receipt is from the 3rd quarter of 2015 and should be in the auto category.
I use the Scanner Pro app on my iPhone to take pictures of receipts when I’m out, and then trash the receipt. The Scanner Pro app connects easily with Evernote, Dropbox and even Box so you can upload receipts and have them there when you need them.
- When it comes to snail mail, it’s best to open it at least every other day.If you use e-statements 100 percent of the time, most mail is trash. Always shred credit card applications (cut them up with a pair of scissors if you don’t own a shredder). For paper bills from new vendors, set up electronic bill pay. I use the ScanSnap scanner for items I want to record, so my office is completely paperless.
- View bank transactions every day.The most important practice for simplifying your finances is logging into your bank accounts and viewing transactions every single day. This takes me less than two minutes. I review the transactions in all of my accounts so I always know what’s happening and can get mistakes (or fraud) cleared up quickly.
- Use the multiple bank account system to automate your finances.I’ve automated my savings so that I pay myself first. This strategy, combined with the multiple bank account system where I have a single spending account with its own debit card, means I never have to balance a checkbook again. See my automation system here
- Know your net worth.Use the free Mint or Personal Capital or WealthVest tools as a financial aggregator so you can see all of your investment accounts and bank accounts in one place. That way, you have your net worth at a single glance — your financial dashboard. Personal net worth is a key financial indicator and knowing it empowers you to better pilot the plane.
By staying on top of those key daily tasks, my finances are completely simplified.
I haven’t had an overdraft fee in years. I don't “balance” my checkbook or wonder how much money I can spend and still make my retirement account contribution. I know the money for Christmas gifts will be there, and I always find that I have more money saved than I can spend on vacations.
That's freedom and simplicity!
This article was originally published on Hilary’s DailyWorth Connect Platform for Experts. July 23, 2015