Managing your finances can be overwhelming as every aspect of our life requires money. But how does one simplify their finances?

Here are 11 minimalist tactics…

1. Create a simple filing system

Arrange incoming letters in a transportable file box with hanging file organisers. Store the file box in a convenient location where you open your mail, such as the kitchen or your home workplace.

Make use of separate folders to organise different types of printed documents i.e. receipts, bills, documents to destroy and to file, and so on, pending the right time to handle them.

2. Use cash whenever possible

Consider embracing a cash-using lifestyle. Use cash as your method of payment for small-value, regular or general purchases. Once you’ve made your purchases, keep the bills and receipts, then move on to the next. Unlike credit cards, you will need to track the expenses for settlement later.

Use your credit card for bigger value purchases that may need buyer protection or a refund. Another benefit is that using cash results in lower spending.

3. Restrict usage to one credit card

If you have an obsession with rewards and zero interest rate promotions, you may have built up a remarkable list of credit cards. But when the rewards and zero interest are consumed, the cards have not much value. Keep them wide open for credit scoring purposes, but direct your credit card spending on a sole card.

Choose one credit card (or at most two) that offers the greatest benefits and set the rest away. It’s much easier to control your expenses and manage outgoings with a sole credit card rather than with five or ten.

4. Automate your savings

Establish a routine on your savings activities. When you’ve determined what amount you want to set aside every month, arrange an auto-debit standing instruction on your checking account to be credited to your respective accounts.

This is an excellent way to make sure you pay yourself first. You will then have the funds available when needed whether it’s an emergency, to travel, or take advantage of opportunities that arise.

5. Automate regular bill payment

Make use of auto-pay options available to automate payments and have one less thing to do and worry about each month.

Some folks are concerned about security and having transactions automated. But, with advanced internet security technologies, you should not be too stressed about it.

Your bills will be settled on time and security concerns are relatively low compared to the large number of transactions that occur. Do practice good online and financial security habits.

6. Keep a financial routine

Maintain a routine for handling your financial transactions. Being besieged with a hundred to-do tasks can sometimes prevent you from completing the more important ones.

To overcome this, build a routine for your financial transactions. List down and categorise all your financial transactions such as repayment of car and housing loans, settlement of credit cards and utility bills according to daily, weekly and monthly transactions. Then schedule the day and time for each.

It need not be followed 100% but at least you have a guided, systematic way and a schedule to follow.

7. Store documents digitally

Opt to get your bills and statements through digital means i.e. e-bills and e-statements. Most financial institutions, credit card companies, utility companies and service providers suggest delivering your mail by email.

Not only are e-documents better for the environment, they’re better for you. They guard against identity theft, lessen the quantity of documents you have to deal with, and help you centralise all incoming financial documents.

You can proceed online to sight older records or print them out if needed. Storage costs are very cheap these days (including free storage) if you need to keep a copy of your documents. Digital copies also protect your documents from fading or getting lost due to natural disasters.

8. Live debt free

Carrying debts cost you money. It also makes living more strenuous. Besides squandering precious time paying bills, debts are significant sources of worry. Getting rid of debts removes at least one complication from your life. Clearing your debts is part of the journey towards financial independence.

9. Simplify your investments

It’s exciting and worthwhile to do your own analysis and invest in individual stocks. However it does require time for research, buying, monitoring and selling. Imagine if you have a dozen or more stocks in your portfolio.

Why not invest in exchange-traded funds, low cost unit trusts and/or investment solutions managed by professionals? Do make sure you aren’t paying an arm and a leg in fees though.

10. Drop unused services

If you are paying for subscriptions and services you barely make use of, it’s time to cancel them. The smaller your number of expenses, the less complex your finances will be.

11. Consider renting instead of buying

A common viewpoint is the long-term economic advantages of buying instead of paying rent to someone else.

However, being a property owner comes with a lengthy list of costs and obligations include repairs and, Malaysia’s #1 past-time – renovating properties.

This article first appeared in https://mypf.my