In today’s busy world, life can involve juggling family, career, and more on a daily basis. Your wealth should be a resource in support of your full lifestyle. However, limited time, financial complexity, or other challenges can often make managing your money just one more task demanding your attention. If you’re looking for ways to simplify your life, one area for consideration is to simplify your finances.
1) Work With A Financial Advisor
Working with an experienced financial advisor is the easiest way to simplify your finances. The right financial advisor can coordinate all aspects of your finances into a comprehensive financial plan that supports your current lifestyle and proactively plans for your future. Your advisor can also liaise with your accountant, estate planning attorney, and other allied professionals on your behalf, ensuring that all your financial decisions work seamlessly together.
A personalized investment strategy is key to achieving your life and wealth goals. Target-date funds may seem like an easy investment option, but come with significant limitations. However, not all financial advisors include investment management as part of their services. SageVest Wealth Management offers integrated wealth services that blend both comprehensive financial planning and customized investment strategies.
While it may seem reasonable to seek a variety of viewpoints by engaging with multiple financial advisors, this can result in a case of ‘Too many cooks spoil the stew’. No one ends up with a complete picture of your finances, and as a result, no one has a firm foundation from which to offer cohesive, consistent, and comprehensive guidance.
2) Avoid Owning Too Many Accounts
Similarly, the old adage of ‘Don’t put all your eggs in one basket’ can also work against you when it comes to money management. Having too many accounts makes it hard to monitor your portfolio positioning, track financial progress, and ultimately, reach your wealth goals. While the SageVest LifeList can help organize account data and other important information, consolidating accounts helps simplify your finances in the long-term.
Too many accounts also create a complex financial landscape for nominated agents to navigate, in the event you become incapacitated or upon death. Because accounts can be like belongings, accumulating over a lifetime, it’s particularly important to talk with aging parents or older relatives about their finances, well in advance of any crisis.
Consolidating accounts can save on account fees, and some account transfers may qualify for sign-up or balance transfer bonuses. Furthermore, reducing the number of accounts you own can help reduce clutter in your home (a proven cause of stress) if you still receive statements and other account paperwork in hard copy.
3) Cut Spending And Reduce Debt
The most important financial principle is that monthly income must exceed expenditures. Spending too much can undermine your saving goals and future financial security, creating debt that adds stress and complications to your life.
Some easy areas to evaluate include:
- Recurring subscriptions and services – These are often on autopay, yet you may no longer want or need that magazine subscription, pool membership, or cable channel.
- Insurance premiums – Most individuals stick with the same insurer. However, a survey conducted by Princeton Survey Research Associates International  showed that shopping around for car insurance reaps significant savings. You might also consider increasing your deductible to lower premiums.
- Entertainment costs – There are plenty of low-cost or free activities for you and your family to enjoy together, and you can reduce your reliance on take-out food by preparing meals together at home, or packing lunch.
4) Use Technology To Simplify Your Daily Finances
Financial technology like Mint can help reduce spending and simplify your day-to-day finances by offering a round-the-clock, on-the-go overview in real time. You can create budgets for different aspects of your financial life, allowing you to pinpoint spending habits and motivate saving. You can also set reminders and automate bill payments, helping to reduce late fees.
5) Automate Your Finances
Simplify your finances by automating the following:
- Savings – Whether you’re accumulating an emergency fund, or saving for a longer term goal like a home purchase, set up monthly recurring savings direct from your pay or via electronic bank transfer.
- Retirement contributions – Max out your work retirement plan and capture any employer matching bonus via automatic payroll deductions. Additionally, set aside savings outside of your company retirement plan. This ensures you’re funding your future with both pre-tax and after-tax dollars, which can save tax dollars in retirement.
- Withholdings – Given the complexities of recent tax reforms, it’s important to adjust your withholdings now, to avoid a potential surprise next tax season.
Simplifying your life helps you make room for the important things. Please contact us to find out how we can help simplify your finances and connect you with your wealth in meaningful ways.