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I don’t want to spend a lot of time managing my money, so I’ve adopted a few simple techniques to make it easy. Here are three of them.
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When it comes to my financial life, I want to have plenty of money in the bank and in my brokerage account. But I don’t want to spend a ton of time actually managing money. I don’t find that fun, and there are better things to do with my limited hours on this earth.
To make sure I can be successful financially without spending hours handling money management, here are three ways I’ve simplified matters.
1. I automate everything
One of the best moves I made to simplify my money management is automating everything. Specifically:
A set amount of money transfers over to my brokerage accounts each month to ensure I’m saving enough for retirement. In total, I have around 20% of my money moved into different investment and savings accounts.My credit card bills, mortgage, utility bills, and almost all other bills come out of my checking account automatically each month.
Since my money goes exactly where I need it to without any intervention on my part, I don’t have to think about whether I’m doing the right thing with it. I also don’t really have to budget, because the money for savings and bills goes out on payday and I know everything I have left in my account is mine to spend as I’d like.
If you do just one thing to make your own money management easier, this would be the technique I’d recommend. Most people tend to just stick with the status quo, so chances are good that once you’ve automated your transfers to savings, you’ll just keep doing it and will end up with the money you need to accomplish financial goals without any extra effort.
2. I have separate savings accounts for different goals
Another way I’ve simplified my money management is to have different savings accounts for different purposes. This may seem to be more complicated on the surface, but it’s not. My opening multiple separate savings accounts, I can:
Move money exactly where it needs to be for different purposes without having to keep track of which portion of my savings is earmarked for things like emergencies versus a new car purchase.Easily keep track of how far along I am with accomplishing financial goals. I can just open up my bank app and see exactly how much I have in different accounts.
My separate savings accounts are earmarked for:
VacationsCar repairsHome repairsHolidays/birthdaysRetirementMedical billsEmergencies
You should also open separate accounts for different things that you hope to accomplish — and decide how much to save in each one. For example, if you want to take a $4,000 vacation once a year, you could open a savings account for that and automate contributions of $334 per month to that account so you’d have the money you need when trip time comes around.
3. I stick to just a few credit cards
I want to maximize the credit card rewards I earn. But I don’t want to have to pay a ton of different credit card bills each month, nor do I want to have to do things like activate quarterly rewards programs.
So, rather than trying to manage dozens of cards or having to remember to activate bonus rewards, I’ve picked three great cards. One maximizes my cash back at Amazon (where I buy almost everything), another I use only for travel, and the third is a general-purpose cash back card that I use for everything else.
If you enjoy the credit card rewards game and can be organized enough to keep track of multiple cards or different rewards programs, getting a bunch of cards could make sense for you. But if you want to keep things simple, you can focus on getting one or two cards that give bonus rewards for the spending you do the most, then a card you use for everything else that pays the most generous cash back possible for everyday purchases. A card offering 2% back for every purchase, like the Citi® Double Cash Card – 18 month BT offer, could be a great option for this.
Ultimately, it’s up to you how much time you want to spend managing different areas of your financial life. But if you want to make things easy, implementing these three techniques I use could go a long way toward helping you to do that — while ensuring you’re still on the path to building wealth.
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