How To Simplify Your Financial Life

Money isn’t a topic that gets the shine it deserves in the standard high school or college curriculum. So, it’s not hard to understand why so many people develop poor money habits.

How are your money habits? Well, if you’re not where you want to be financially I’ve got good news for you. True wealth isn’t about what you wear, where you live, or what you park in front of the house.

More important than anything you have is everything that you think & believe.

Remember these words… Wealth doesn’t look different. Wealth acts different.

If you want to upgrade your financial life it all starts with your money mindset. Making the choice to see your money situation more strategically is the first step to reinventing yourself financially.

In this article, I’m going to give you 6 ways to simplify and supercharge your financial life.

Are you ready to get your money mind right? Cool, let’s get it then…

6 Habits To Improve Your Financial Situation

Fifteen-Minute Weekly Check-in

Your money won’t manage itself.

The first step in getting control of your finances is to shine a light on your current spending habits.

Once you are aware of how much money comes in, how much money goes out, and where exactly that money goes each month, then you can start to get a sense of where you stand. There is no sense in making a plan of where you want to go before you fully understand where you currently are.

Identify your financial blind spots and pinpoint areas where there are holes in your money bucket.

Check your monthly expenses for the following cash killers:

  • Old subscriptions that you aren’t making use of but you’re still paying for

  • Areas of excessive spending that can be cut back

  • Areas of mindless spending that can be completely eliminated

  • Account fees that you can avoid or minimize

I have been using the mobile app Mint for many years, and it helps me keep tabs on my cash flow.

If you can dedicate 15 minutes each week to review your in-flows and out-flows, you will already be heading one step in the right direction.

Trim The Costs

Now that you’ve identified potential budget optimization opportunities you need to pretend you’re a high school basketball coach and start making cuts.

Over time, we accumulate a lot of dead weight financially. It can be refreshing to declutter your financial closet and let go of monthly or annual commitments that you no longer need.

For instance, you might have various subscriptions that you’re just not using, like a gym membership, a magazine subscription or a redundant Netflix account that you signed up for before you met your girlfriend / boyfriend (thanks, Love 😁).

Eliminate Your Debt

While you might have a grip on your daily cash flow, if you’re carrying debt it'll be difficult to make any significant progress.

While there are many paths to improving your financial situation, the best all involve getting rid of your debt.

Even if you’re only taking small steps, every bit counts. Just keep moving in the right direction!

The main thing is to keep chipping away at what you owe and whenever you find yourself with a large influx of unexpected cash, pay down a chunk of your total outstanding balance.

If you’re carrying multiple debts, then you could attempt to consolidate your debt. Consolidation can simplify your life because rather than having to pay multiple different expenses, you’ll just have one manageable payment to make.

In order for this to be successful, you need to have discipline.

It would be a shame if you consolidated all of your debt and then immediately began overextending on your credit cards again. Also, make sure you fully understand the terms of your consolidation agreement. Consider all options available to you before taking any action.

Prioritize Goals

Personally, I have a LOT of goals. I’d assume you have at least a couple yourself.

Maybe you want to buy a house, or go on vacation, or pay for your kid’s education, or maybe you just want to retire by a certain age.

With enough clarity on what you truly want you can begin to put together a plan to get there. Setting your goals is the first real step to achieving anything significant in life. Anyone who has willed their way to success in anything will attest to that.

Setting goals, however, is only part of the battle. Then you need to prioritize.

There is a difference between moving the ball down the field, scoring, and winning the game. You see, you can’t win the game if you never score. And you can’t score if you don’t move the ball.

So, what will be your first move? How will what you do today put you in a better position to “score” in the future?

Having clarity allows you to plot your course, but having priorities will help you stay on track and make sure that you are on track and gaining ground towards your target.

Create An Emergency Fund

Nothing can derail a financial plan quite like an unexpected expense that you’re unprepared for. That’s why you need to create an emergency fund.

General personal finance wisdom suggests that you save up about 3 to 6 months worth of expenses to keep you afloat when times get shaky. Luckily, if you’re already tracking your expenses like we talked about earlier, it won’t be too hard to figure out your average monthly expenditure.

Now, to be comfortable you can use your total average expense to calculate your emergency fund.

On the other hand, if you want to run a leaner emergency budget, only take your essential expenses into account. That means you don’t add any expense that you will be able to cut off if you need to tighten the financial belt for a while.

Practice Self-Denial

Finally, one of the best, most effective ways to simplify your finances is to practice a little bit of self-restraint.

All your hard work can be undone with one click of the “add to cart” button if you’re not careful. That doesn’t mean that you need to deprive yourself of luxury or abandon all forms of convenience. Not at all.

I want you to spend with intention.

In her world-renowned book “Your Money Or Your Life”, author Vicki Robin teaches us how to look at our money for what it really represents - Our Life Energy.

We go to work, we commute, and we exchange time we will never get back for dollars. Then, we spend those dollars without remembering what we actually had to do to get them.

The best way to stop yourself from overspending is to think about your dollars as time.

Maybe if you are more conscious of what you’re giving up, you will think twice about letting it go so easily.