What do you see?
Are there old receipts, bills, coins, photos, credit cards, discount cards, IDs, etc?
A fat and a bulky wallet is not always a sign that you have a lot of money. It’s most likely a sign that you are disorganized.
Most people do general house cleaning every year-end because they want to start the new year fresh and clutter-free!
As we put effort to keep our houses clean, let’s also consider tidying up our finances. Begin with our own wallets.
Why do we need to declutter?
Decluttering helps us save energy, time and money.
Do you often misplace your bank statements, passbooks, bills and other important financial documents?
Do you always forget to pay your bills on time?
If we have lots of things at hand, we become more distracted.
To be more productive, we need to keep things simple.
Start organizing now. Who likes clutter anyway?
Here are few ways to get you started.
1. Keep your home clean
Important documents like birth certificate, passport, passbooks, marriage certificate, land titles and others should be kept intact. Put them in a folder, keep them secured and have them properly labeled.
Throw the things you don’t need. A clear surrounding helps us concentrate and lowers stress.
Go over your closet. Sell or donate clothes and shoes you don’t wear anymore. Sell stuff online or through a garage sale. You finally get rid of the clutter and at the same time earn money which you can put in your emergency fund.
2. Track your finances
“Where has my money gone?”
You lose track of your finances because you don’t budget.
Plan how will you spend your money. What are your cash inflows and outflows?
Create a personal spreadsheet for your budget and always stick to it.
Have a detailed summary of all your financial assets like bank accounts, retirement funds, college savings accounts, insurance and financial liabilities like bank loans, credit cards, etc.
Contact your financial partners and subscribe for a secured online access to your accounts. You can easily track the movements of your investments if you have one.
There are lots of money management apps and tools online. Let’s maximize its uses.
3. Subscribe to E-Statements
Do you like seeing stacked bills over your table? It will just make you anxious every time you see your obligations piling up.
It’s much worse if the bills were not delivered on time. That means you’re late for payment too and late payment means penalties.
Go paperless. Most companies encourage e-statement enrollments because it has fewer costs, saving them supplies and delivery fees. It is also environment-friendly and it protects you from identity theft.
Having a centralized mail of your financial documents allows you to hold a record of all your expenses and skip the shredding activity.
If possible, create two emails. One for personal and the other for finances or for business use. Clean out your inbox. It is an eyesore to see lots of unopened messages from sites you have subscribed into. Start unfollowing and just keep those necessary.
4. Automate payments and investments
Skip the long queues. Subscribe to your bank’s auto payment feature. Never need to worry about your loans and debts being paid on time. Just make sure you have enough cash to cover all the bills.
As you automate payments, automate your savings as well. Upon the release of your paycheck, allocate first a portion of your income to savings and investments. No matter how small the amount is, it will eventually add up over time.
When you’re done paying yourself and other obligations, you can now enjoy what’s left on your account without feeling guilty.
5. Limit the number of your credit cards
Cutting all your credit cards can affect your credit scoring so it is safe to settle with at least two cards.
It is hard to keep track of credit balances and to remember due dates if you have many. In addition, having a lower credit limit can also save you from splurging.
6. Consolidate your debt
Do you know that some credit card companies offer a balance transfer or consolidation of multiple debts into one? People often use this to take advantage of lower interest rates. It comes with a fee so assess if this will benefit you in case.
Decluttering may be difficult if you’re attached to the things you own. But remember, clutter eats time, space and money and this may slow you down in reaching financial success.
So make the effort now and make room for new blessings into your life.