“Simplicity is the peak of civilization.” – Jessee Sampter

Simplifying things means different things to different people.  For me, simplicity means automating things that I don’t really enjoy or don’t want to do so that I can focus on what is really important.   Simplifying things also brings clarity and eliminates chaos from my life.

Remember that “Getting There” (to simplicity takes time) and is a journey you take one step at a time. The following are a few (5) things I recommend doing as a starter guide for simplifying your financial life.  One of the best ways to begin is to make your own list and identify what is most important to you and then work to get rid of everything else.

1) Automate Your Personal Finances – This takes a little time to set up.  Once you do, it will provide you many benefits like avoding late fees, improving your credit rating and most important:  give you peace of mind.   I wrote the following post: How To Automate Your Personal Finances if you would like a primer.  

2) Maximize Interest On Savings Accounts – If you are frustrated (more stress) with the low interest rates offered by financial institutions, at least make sure you are earning the highest rates available.    The following 2 posts should be very helpful in getting you started earning higher interest rates in 2010: Top Interest Rates for Checking, CDs and Money Market Accounts  and How I am Earning 4.04% on My Checking Account and You Can Too.

3) Begin To Automate Your Income – This is a definite long term goal and it can be done.  This is also my #1 Personal Goal for 2010.  By automating your income I “mean” that your income continues whether you work or not.  For me that equals Freedom!   Here is a great artilce from Zen Habits Automate Your Income .  By the way, I’d highly recommend Zen Habits as one of your daily blog reads. 

4)  Make a Budget and Follow it - This one may seem a bit obvious, but for some reason most people don’t follow this simple rule, Budgeting makes you stronger financially.  Personally, I prefer a simple spreadsheet to the financial programs like Quicken.  I use an excel spreadsheet and keep things very simple.  If you haven’t started try this, put all your expenses in one column, then your income sources in the another.  Then, periodically review all your transactions and how you are spending your money.  (I do this once per month.)   Looks for ways to eliminate waste.   When it comes to paying bills which I automate, list all your bills in one worksheet along with the due dates and typical amounts, logins, passwords for your bill payors, etc.  (Note: This is a very simple way of  budgeting and the best way to get started if you haven’t already.)

5) Eliminate Unnecessary Investment Costs – With so many options available, how do you choose the best financial resources?   A couple months ago, I wrote a post on 4 Ways To Cut Investment Expenses.  Check this out and make sure you aren’t overpaying for things that offer a lower cost alternative.

Ok, there you have it: 5 Ways To Simplify Your Financial Life.  If you would like to suggest any personal favorites, please share these in the comments section.

Related posts:

1. 4 Steps To Turn Your Financial Life Around