“Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand. Instead of a million, count half a dozen, and keep your accounts on your thumb-nail.” ~ Henry David Thoreau
What does financial simplicity mean to you? For me, it’s the feeling that we are in control of our money, rather than having our financial situation control us. It’s the peace that comes from living within our means. It’s a good night’s sleep, with a minimum of money worries.
Here are some of the ways we try to simplify the finances in our household:
- Specific, achievable goals for retirement, college, vacations and other large purchases.
- The fewest monthly bills possible, paid electronically to reduce paper.
- Bills paid on time. Because my income fluctuates as a writer, at the beginning of each month I make a list of bills, in order of the due date, and a monthly budget. This system has virtually eliminated late payments and fees.
- Money set aside regularly for annual bills like taxes and insurance. I have a special savings account to save for large annual expenses, and figure out how much to contribute each month so the big bills are usually covered.
- A neat, orderly system. Okay, I’m always working on better organization. But I do keep up with filing papers on a fairly consistent basis, and I’m moving on converting more paperwork to digital files and online billing.
- Giving is budgeted along with our other expenses.
- Savings is set aside each month and added to regularly. Savings is another line item on the budget.
- Discipline. At the end of each month I calculate our net worth, which is the only way I’ve found to truly stay honest about the state of our finances.
Have you found additional ways to simplify how you manage money? I’d love to hear your thoughts.