Simplify and Organize Your Financial Life

Introduction

Are you tired of feeling overwhelmed by your finances? You’re not alone. Many people find managing their financial lives to be a daunting task. In a recent episode of "Money Talk with Skyler Fleming," financial expert Alexis Boccanfuso shared her insights on how to bring order to your financial chaos. As a Certified Professional Organizer, Certified Daily Money Manager, and Certified Professional Coach, Alexis provides invaluable advice on simplifying and organizing your finances. In this blog post, we’ll dive into the key takeaways from their conversation and explore actionable steps you can implement today to regain control of your financial life.

You’ll notice a theme in this week’s episode all around simplicity and organization. I like the idea of keeping it simple instead of overcomplicating your life for the sake of more money. Why else would we want to add complexity to our lives if we don’t think it’s going to provide us with a gain financially? But I’d like to suggest that we can actually avoid complexity and still make our financial lives better. That’s what this week’s episode addresses with organizing your finances and that’s what this blog post will help you with as well.

Why Are Finances Often Disorganized?

Disorganization in finances can stem from a variety of sources. Alexis points out that some people have never been organized due to limited financial literacy or negative beliefs about money. Our financial lives are more complex than ever, with bills arriving via multiple channels and various payment methods complicating the landscape.

Common Causes of Financial Disorganization

1. Limited Financial Literacy: Lack of understanding about financial management basics can lead to chaos.
2. Technological Complexity: Multiple avenues for receiving and paying bills—email, text, mail, online—can create confusion.
3. Life Events: Major changes like marriage, divorce, or illness can disrupt previously orderly financial systems.

There are countless tools to help you simplify your life. But you need to be careful about adding more and more tools to your life as this can often create even more complexity in the same of simplicity. Which doesn’t help anyone except the software creators who profit off of your usage of their program. So make sure you are being careful when introducing new technology into your life. Even if you think it will make your life simpler. Make sure you take a good look at it before you sign up.

The Role of Simplicity in Financial Management

Simplicity is a powerful tool in financial management. Alexis emphasizes that having clear systems in place can significantly reduce stress and improve time management. By eliminating unnecessary complexities, you can focus on what truly matters.

Benefits of Simplifying Your Finances

1. Reduced Anxiety and Stress: Clear systems make managing finances less daunting.
2. Improved Time Management: Simplified processes save time and effort.
3. Better Financial Health: Organized finances lead to better decision-making and financial health.

We will talk about automation a little later in this article but I wanted to emphasize the importance of systems in your financial life. I’m currently working on a podcast episode to talk more about systems and how they can help you both financially and in your everyday life. But systems can help you take the behavior and emotion out of decision-making. It can me it a whole lot easier to manage when you know you have a system in place.

My wife and I write down our financial plan and update it every 3 months. This has become a system that allows me to stay sane with financial ideas and allows my wife to not get overwhelmed by me talking to her about new crazy ideas all the time. This is a great example of a system that allows us to take some strain and confusion out of our financial lives. Don’t forget the added benefit of not having to worry about remembering every little thing when it comes to our finances. Systems are a huge win, especially once they’ve been implemented for a while.

Steps to Get Organized

Getting started with financial organization can seem overwhelming, but Alexis breaks it down into manageable steps. The process involves evaluating what you have, reducing clutter, developing systems, and maintaining them.

Step-by-Step Guide to Financial Organization

1. Evaluate and Edit: Review all your financial statements and identify subscriptions and expenses.
2. Sort and Contain: Create a system to manage your financial information, such as a spreadsheet.
3. Review and Maintain: Regularly update and review your financial system to ensure it stays relevant.

Subscriptions are the best place to start with this. It’s a simple item that everyone deals with. Let’s start at the beginning, evaluate your subscriptions. This means you have to build a note or a spreadsheet that can house a list of all your subscriptions. Then evaluate if you use them or not. I’d even encourage you to turn off autopay and cancel your subscription so it does not renew. This way you will automatically know which subscriptions you don’t use. Then you won’t have to worry about automatically paying for them when you don’t use them. This allows you to flip the automation back into your favor.

Sorting and containing your subscriptions or whatever you are trying to organize is essential. If you don’t have the data housed somewhere, how are you ever going to know what is truly going on? If you leave it up to your mind to remember it, there is a very high chance you will forget it. One of my favorite things I like to say is that I don’t forget anything because I make sure I don’t have to remember anything. This goes for all the little things in our lives. Like we talked about earlier with systems, once they are in place we can rest easy knowing we are going to remember what we need.

Don’t forget to come back and review your system and your organized list later. What good is it going to do if you never look at it again? Then it just becomes fluff that will confuse us later down the road. Use your phone or schedule an email to yourself to remind you to check on it once every 3-6 months so you can evaluate your subscriptions or whatever you are looking to organize.

Automating Your Finances

Automation can be a game-changer in financial management. Alexis highlights the benefits of setting up automatic payments and transfers to streamline your financial tasks. This not only ensures that bills are paid on time but also helps in building savings without much effort.

Advantages of Financial Automation

1. Timely Payments: Avoid late fees and improve credit scores by automating bill payments.
2. Effortless Savings: Automate transfers to savings accounts to build a financial cushion.
3. Reduced Human Error: Minimize the risk of missing payments or making errors in manual transactions.

One of the best places to improve your financial life once you have the basics in order is to automate. But be careful not to get ahead of yourself with automation. I know it can be appealing to have computers and everything do stuff for you. But if you don’t understand how it works or why the automation is needed, you end up creating confusion for yourself.

So start by doing the tasks on your own and then you will recognize places to automation. So pay your bills for a few months on your own and then you can recognize an easy place to automation. Then when you automation it allows you to take the humanness out of our finances and make it a whole lot easier to manage. Once you can establish a habit of investing, then you can automate it. Which will make it a whole lot easier to avoid selling when you shouldn’t sell your investments. Since your automation is taking care of investing more money you never see the ups and downs. You just want until you need the money and take out the profits after a long time investing.

Creating a Budget that Works

A well-planned budget is the foundation of financial health. Alexis explains the importance of creating a realistic budget that aligns with your financial goals and lifestyle. A budget helps you track income, control expenses, and plan for future financial needs.

Steps to Creating an Effective Budget

1. Track Income and Expenses: Document all sources of income and categorize your expenses.
2. Set Financial Goals: Define short-term and long-term financial goals.
3. Adjust as Needed: Regularly review and adjust your budget to reflect changes in income or expenses.

Before you can even start budgeting you need to make sure you understand how to track your expenses. This can be done a number of ways. There are many apps available that you can track your spending automatically just by connecting your accounts. You can go the old-fashioned way of a checkbook with paper and pen. You can also use a spreadsheet to track it all. Ask yourself if you need the reminder of your spending by putting things in manually or if you are ok to check it regularly and actually seek to understand your spending. I know for me, automatic entry doesn’t work. This is because I need a mental reminder of how much money we are spending by inputting it manually. But this all goes to the importance of tracking. If you aren’t tracking your expenses how are you ever going to know how much you need to budget!

The Importance of Regular Financial Checkups

Regular financial checkups are essential to ensure that you stay on track with your financial goals. Alexis recommends setting aside time periodically to review your finances, make adjustments, and celebrate progress.

Conducting Financial Checkups

1. Schedule Reviews: Set a regular schedule for financial reviews, such as monthly or quarterly.
2. Assess Progress: Evaluate how well you are meeting your financial goals.
3. Make Adjustments: Adjust your budget, savings, and investment strategies as needed.

I’d like to add something here that I haven’t talked about in a while and that is checking your net worth. Holding an annual net worth meeting can be a great way to get your numbers working in the right direction. Seeing your net worth go up can be a huge motivator for anyone. Seeing a negative net worth can be the massive push you need to finally get out of debt. So consider implementing an annual or quarterly net worth meeting to take a chance and review where you are financially.

Conclusion

Organizing your finances may seem like a daunting task, but with the right strategies and tools, it is entirely achievable. Alexis Boccanfuso’s expert advice highlights the importance of simplicity, automation, and regular reviews in maintaining financial health. By following the steps outlined in this blog post, you can take control of your financial life, reduce stress, and work towards achieving your financial goals. Remember, the key to financial success is consistency and continuous improvement. Start small, stay organized, and watch your financial health flourish.

Money Talk with Skyler Fleming

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