Simplify Your Finances

By: ispeculatornew
Date posted: 08.07.2012 (3:13 pm) | Write a Comment  (0 Comments)

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Minimalism has been a growing trend in recent years and my online company has been part of that thanks to a recent acquisition of EveryDayMinimalist by our online company, I have been even more interested in the philosophy. Since then, I’ve been trying to simplify my life in a gradual but consistent way.

Why Simplification?

There are many different reasons of course but for me it’s about making my life easy and efficient. How am I doing it and why?

Consolidating accounts: It becomes very easy over the years to open several accounts that are simply not used. Those may or may not have fees which would of course mean savings. Also, it becomes very time consuming to make sure that funds held in each account are being used efficiently, that bills are being paid, etc. There can be some value to having a backup account, or one in a country that you visit frequently, etc. But having additional accounts just for the sake of it is not a good idea. There are also benefits to having all of your assets at one institution in order to be considered more important and get better service & rates rather than splitting everything into so many accounts that you’re not worth those bank’s time and resources.

Automate Your Finances: I try to do this as much as possible. I automate bill payments, transfers between accounts, contributions to retirement accounts and even some investments. It’s as much about being efficient as it is about having a free mind and not worrying about forgetting something. I know that my cable bill is paid every month and while I can go in and adjust the amount if needed, it’ll get paid if ever I go on vacations, have an emergency, etc. Since I also try to avoid timing the market in retirement/passive accounts, it becomes much easier to simply send myself an email every 1st of the month to rebalance if needed or to reinvest any money in the account.

Do Keep Shopping Around: Yes, I did say that I try to keep all of my assets with one financial institution. That does not however mean that I simply take everything that they give me and shut up. I do my best to keep updated on the market, on what rates other institutions offer, etc. I would not switch my things every year because of the huge workload involved but it’s still good to know if you are getting great conditions so that you can switch if needed or better negotiate. The most obvious example is shopping for a mortgage where the difference between someone who gets a great rate or someone who simply comes in and takes the first rate he is offered can turn out to be many tens of thousands of dollars if not more.

What about you? Do you consider managing your finances to be simple? Is it getting easier or simply more complex over the years?

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