Streamlining Your Finances Can Eliminate Headaches by Saving Time and Effort
If you are the sort of person who shops at three different grocery stores because milk is cheaper here and potatoes cheaper there, don’t bother to read this story. It’s about saving time by streamlining your financial life, not saving money.
Our financial lives are more complicated than ever. We manage our own retirement accounts, carry separate credit cards for clothes, gasoline, airline tickets and long distance calls. We know what bank offers the best checking account, which money fund pays the highest interest, and how often to refinance our homes.
But we are exhausted.
January is a good time to get organized for the new year, breaking bad habits or starting good ones. Here are some ways to streamline your finances:
* Transfer all of your bank accounts to the bank nearest your home (or office) with the most convenient hours. Ask for a consolidated statement. But if your accounts total more than $100,000, don’t simplify quite this much; you could jeopardize your FDIC insurance coverage.
* Find out how much you can do through direct payroll deductions. You can pay for health insurance, buy U.S. savings bonds or donate to charity before you even see the check.
* Arrange to have your paycheck deposited directly into your checking account and authorize as many direct payments as possible. You can pay your mortgage and utility bills or invest for college or retirement without writing a check.
* Pick two charities and promise to ignore all others.
* Send back your junk mail with the statement “Please Remove Me From Your Mailing List” written on it. Sure, it takes a little longer now, but there will be a payoff down the road.
* Don’t even think about timing your investments, it often doesn’t work anyway. Pick a couple of very broad mutual funds that will buy stocks and bonds and invest both domestically and internationally. Invest regularly and do something else while other people maniacally check the charts.
* Consolidate your IRAs. Remember when you put $1,000 here and $1,000 there? Put them with one fund company, in one fund or with one discount broker. Just don’t mingle accounts that don’t mix, such as tax-deductible IRAs with those that aren’t, Keoghs with IRAs, or company rollovers with personal retirement accounts.
* Toss most of the plastic. Two cards ought to be enough for anyone. So what if you got 10% off your last suit by opening one charge, and 500 frequent flier miles for another? Cancel them and stop all the accounting.
* Create a box marked “Taxes 1995.” All year long, just throw your deductible receipts and pertinent papers there.
* Put your finances on computer. Quicken or Managing Your Money take some time to set up, but isn’t that why you bought the computer in the first place? Once you’re up and running, you can balance your checkbook, pay bills automatically or generate a year-end tax report in a flash.
* Hire help. It doesn’t take a huge investment to have somebody pay your bills, carry your dry cleaning or, once and for all, file your paperwork. Make hiring a “secretary for a day” a gift to yourself.
