5 easy ways to simplify your finances

20 July 2022

Savings

Jonathan Smith
Jonathan Smith

Managing your money can get complicated. Once you have a few credit cards, savings accounts, pensions and bills to pay, it’s easy to get tangled up in the web that we end up weaving for ourselves. Unfortunately, this can make keeping on top of your finances a real time sink and chore every month.

We’ve put together a few easy tips that might just help you streamline your finances and all that comes with it. Read on to find out how to unscramble your funds.

Automate your monthly bills and savings

When payday arrives, do you find yourself frantically paying bills and moving money? By setting up automatic payments and direct debits, you can avoid the stress of dealing with these tasks and remove the risk of ending up with an accidental missed payment on your credit record.

You should be able to set up a direct debit with your bank to pay your bills. Just make sure that you can afford the amount you choose and that it will cover any minimum payments. You can also set up a standing payment from your current account into a savings account, allowing your rainy day fund to grow without having to spare a thought — again, just be sure to choose an affordable monthly amount and keep an eye on your account throughout the month.

Consolidate your accounts

As you live life and your circumstances change, it’s easy to find yourself with accounts for different purposes. Whether you’ve accumulated a few different savings pots over the years or you’ve changed jobs and ended up with several pensions, things can get messy.

If you find it hard to keep track of multiple accounts, it might be worth reviewing them to see if you can consolidate them into just one or two that are easier to manage. A little bit of reorganisation can be enough to save you from a regular headache.

It is worth having a think before taking action, though. Moving savings around shouldn’t be too troublesome, but we always recommend seeking financial advice before you touch pensions, assets or large lump sums to ensure you’re making the right decisions.

Focus on reducing your debt

When you have multiple debts with different lenders it can be stressful and difficult to track. Unfortunately, there’s no quick fix to this issue, and your best plan of action is to reduce your debt to a manageable level. There are, however, a couple of methods that you can use to both reduce debt and to impose order on your monthly payments.

You may wish to try the “snowball method”, which involves paying off the smallest debt you have with as much as you can afford after meeting the minimum payments on your larger debts. The idea is that you gain confidence by paying off your smallest debt and continue your momentum onto the next one. It also quickly removes another debt you need to think about.

Another path is the “avalanche method”, where you order your debts by their interest rates from high to low, then you concentrate on paying off the most expensive debt as much as you can (while making minimum payments on others). Results may not be as instant as the “snowball” method but, in theory, it will cost you less in interest.

Go all digital with your finances

Do you regularly have stacks of paper bills and statements waiting to be opened? Do you spend hours filing everything away for your records? Then it may be time to boot this needless complexity out of your life by going paperless with your finances.

Most banks and building societies now have an option for going completely paperless with your accounts, which means they will switch to contacting you digitally. This usually means that you can get access to all of your bills either online or through an app, which is a lot more intuitive than poring through paperwork. There’s also the added bonus of saving a few trees and doing your bit for the planet!

Focus on one financial goal at a time

It’s good to have financial goals, but you don’t need to work towards all of them all of the time. Spreading your funds too thinly can leave you feeling like you’re not making any progress, not to mention that it makes your plans unnecessarily complex.

Instead, consider focusing on achieving one or two goals. You don’t need to forget about your other targets, just put them on the back burner until you’ve ticked off a few more achievable goals. Hopefully, you can make some real progress while not adding extra stress to your financial plans every month.