Take Your Finances From Overwhelming to Easy-Breezy With These 7 Steps
When it comes to managing money, things can get overwhelming fast.
It can be tempting to apply for a new credit card with better rewards or open a new bank account with higher interest. But doing those things can quickly lead to a wallet full of plastic or a mailbox full of bank statements, and the clutter only causes more stress.
Luckily, it’s pretty easy to simplify your finances in seven easy steps.
1. Consolidate bank accounts
At most, you should have two bank accounts: a local account, which can be a large bank or something like a local credit union, to house the checking account you use daily and an online account that yields higher interest for housing the majority of your savings.
2. Cut down on credit cards
With credit cards, it’s pretty much the same thing: Forbes recommends having just two. One should be a card with 1.5 to 2 percent cash back on purchases, and the other should be a card with great mileage or point rewards. If you do have more cards than that, remember to just pay off their balances and then put them somewhere safe so you don’t use them again — closing credit cards can ding your credit score.
3. Switch to a wireless carrier with no annual contract
Cellphone plans are notorious for coming with hidden costs and surprise bills, meaning your monthly bill is probably full of unwanted surprises. Switching to a phone carrier that doesn't require an annual contract, like Cricket Wireless doesn’t even mean giving up your favorite smartphone model — it just means knowing exactly how much you’re paying, and never a penny more. And forget about coverage worries. With Cricket, you'll still get nationwide reliable connectivity, all wrapped up in a simple, straight-forward plan that won't leave you scratching your head.
4. Consolidate retirement accounts
Retirement accounts are easy to simplify. Your 401(k)s from past employers can be converted into IRAs or sometimes even rolled over into a new 401(k). Multiple IRA accounts can be consolidated into one. Even though changing jobs often means starting a new retirement account, they can almost always be consolidated into just one.
5. Streamline insurance
Some kinds of insurance, like health insurance, have to be purchased individually. But for other accounts, like car, rental, homeowners and life insurance, they can all be purchased from the same provider. Not only does that simplify things, but many providers offer discounts to customers who purchase multiple kinds of insurance from one agency.
6. Reduce subscriptions
Are you using everything you get in your monthly Ipsy bag? Really listening to Spotify and Apple Music? Does your household really need Netflix, Hulu and HBO Go? Cutting down on subscriptions you don’t use is a great way to simplify your finances and save some cash every month. A simple way to do it is with Trim, a site that will send you a text with all the services you subscribe to and allow you to cancel the ones you don’t want just by replying with another text.
7. Get debt-free
Not only does owing money cost you more in the long run, but it’s a huge source of stress. Paying off debt won’t happen overnight, but making a plan to do it as efficiently as possible can really simplify your life. Sites like ReadyForZero and The Balance provide free tools that help people make a plan and stick to it to pay off debt.
This post was sponsored by Cricket Wireless.