Fortunately, personal finance is an area that we can take some immediate action to become more efficient with time.  But, make no mistake, managing money wisely does require some work.  There’s just no getting around it.

I haven’t done a post on simplifying your personal finances, so I thought I would put a few ideas together based on my experience.  I tried to keep this post to just 10 solid ideas that are in no specific order.  Why just 10?  Well, I thought listing too many might over complicate things.  And we’re trying to simplify, right?  Also, with only providing 10, I’ve left the door open for you to provide your favorite tips.

10 Ways to Simplify Your Finances

1.  Use online bill pay

Most banks or online budgeting software offer online bill pay features today.  It’s been several years ago that I started paying all of our bills online.  What used to take an hour  (sometimes more) to write checks, stuff them in the envelopes and mail them, now takes just a few minutes.  Tip:  if you use personal finance software, such as Mvelopes Personal, you may find a built in bill pay feature.  With the Mvelopes bill pay feature, I can pay bills out of any of my accounts.   Obviously, in using one bank’s bill pay feature, I can only pay bills out of that account.

2.  Create a financial file system for documents and papers

Our financial file system was adapted from the Finish Rich File system by David Bach.  It has saved me plenty of heartache by providing a quick easy way for me to store all of our important documents.  The approach here is to avoid the pile of papers on your home desk each week.  I’ve recently converted from a metal file cabinet to a smaller portable storage file for filing paperwork I receive in the mail each week.  The idea here is to file as you go and don’t let the papers pile up!

3.  Sign up for electronic delivery of bills and statements

Most of your bank accounts, brokerage accounts and service providers have the ability to delivery all of your bills and statements electronically.  This is quite nice if you pay attention to your email.  It saves the environment, but also helps you avoid organizing paperwork at home.  If you ever need to review a bill or statement, you can check the online archive after signing into your account.  Note:  make sure you’re able to review 1 year’s history before signing up.

4.  Create a monthly spending plan

You probably knew I was going to go here.  Having a budget, or spending plan for your money, as long as it’s not overly complex, helps determine in advance how your money will be allocated for the month.  Also, determining spending decisions in advance of the month helps avoid emotional spending decisions and conversations with your spouse later.  I’ve always looked at having a monthly plan as a road map to the larger goals I’ve set for the year and beyond.

5.  Reduce categories for your monthly spending plan

This one is very important and I’ve learned the hard way.  Having a plan for your spending is important, but don’t over complicate it.  The more spending categories you create, the more you have to track spending to them.  Remember, you’re not a public accountant for a business, so just keep your tracking simple.  If it’s not, you won’t do it and cash flow management is critical to staying on track with spending each month.  Tip:  Start with these 10 simple categories:  housing, food, auto, insurance, debts, entertainment, clothing, savings, medical, miscellaneous, investments, school/child care.

6.  Roll over your 401k’s and consolidate other investment accounts

If you have 401k’s from past jobs it’s much easier to manage them and review results while under one financial institution.   While it may take a little bit of time to set up 401k rollovers it’s well worth it.   I just recently went through this process and it wasn’t so bad.  Now I just log on an review all my accounts in one place.  If I need to make any future changes, I can go to one institution and talk to them about making those changes.

Tip:  Also, review how many checking and/or savings accounts you have open.  Generally, more than 2 savings accounts or 2 checking account becomes a lot to manage.  Consolidate these where possible!

7.  Level pay your utilities

Consider setting up level pay for your utilities to help make budgeting for this expense easier each month.  Just make sure it doesn’t tempt you to keep the house warmer in the winter and cooler in the summer resulting in increased spending.  Why is this simplifying?  Well, a budget or budget category that fluctuates each month can become more to manage.  In the middle of winter or summer, you have to think about where the extra money will come from to pay the increased bill.

8. Own less stuff (including your house).

Clearly, the more things you have, the more time it takes to organize them, use them, play with them, look at them, etc.  Try to purge your house of unused clothing and other items at least once per year.  This is also a great opportunity to either make extra money by having a garage sale, or receive a tax donation by giving your items away.  Just make sure you receive a giving receipt for any items donated.

9.  Have an affordable mortgage

In talking about owning less stuff, it’s appropriate to include the mortgage in the conversation.   The bigger your house, the bigger the bills and the more work associated with maintaining it.  If you’re looking for a new house this year, make sure it’s affordable, within your budget and don’t take on more home than you really need.

10.  Prioritize your personal finance to do’s

I will typically keep a list of personal finance to do’s such as update our will, file income taxes, change to electronic billing, etc.  But I’m realistic to know there isn’t any way possible all of these things are going to get completed in one day.  Having a list of to do’s is good management.  But also schedule when those to do’s are to be completed so that you’re not overwhelming yourself each day with them.  It’s just too difficult to get everything done in one day (or week) sometimes.

I’m sure I’ve brushed the surface of ideas to simplify your personal finances.  What’s your favorite idea either from this list or another tip you have to share with other readers?

One tool used in training was a problem solving technique.  Knowing well how many of us seem to be email challenged in terms of staying on top of all the emails either received personally or corporately, I decided to throw out the issue for our problem solving exercise.

Outlook email tips

Below are tips, if you’re an Microsoft Outlook user, that might just help you manage time more effectively.  Amongst many ideas, here are the three options we recommended to the class.  Forgive the simple nature if you’re an experienced Outlook user.  However, I’ve known about a few of these below for a while, but for whatever reason, I didn’t choose to implement them until now.  Thankfully, I did.

Set up folders for important categories

For example, I set up categories for departmental leadership and my customers.   Create rules to manage your inbox.  Outlook has a feature in which you can create specific rules based on sender, recipient, subject line and content key words that will automatically send emails to your category folders.   Create and run the rules that meet your needs.

Create an email time policy for yourself

Pick three times during the day (beginning, middle and end) in which you will review and respond to emails.  This is a biggy.  Most of us could spend the entire day on email, but we know this takes us away from the all important list of to do’s.

Leverage Outlook tasks

If you can’t respond to an email immediately it probably requires you to perform a task.  Use Outlook tasks to manage these tasks.  I drag emails to tasks and turn them into tasks for prioritization with other work.  Now, each day I can quickly review my task list, again by category, and pick out the top tasks in which I need to accomplish for the day.

After being out of the office the last 3 days for training, I had accomulated over 150 emails in my inbox.  Implementing my new process today, I now have a few unread emails in my category folders waiting for me to review.  I honestly couldn’t believe how efficient I became at managing emails today and successfully created more time to focus on my task list.

For the non Outlook users, I haven’t investigated yet, but you might be able to do something similar with Gmail or other popular email services.   What do you think about these ideas?  Let me know in the comments.

Round Up

To kick things off, I’m pleased to announce my article, Can Money By Happiness?, was included in The Carnival of Personal Finance #223 – National Dog Week hosted by My Life ROI.

Win the retirement race

According to Redeeming Riches, “the retirement race is a marathon – not a sprint.”  One of the tips, “define goals and review them regularly” was a nice reminder that I need to meet with my financial advisor this year.

I know there are a lot of people who choose to take retirement investing into their own hands and that is perfectly fine if you have the know – how.  For me, I prefer to work with a trusted advisor who can give me advice about investment options.

Depending on your life stage, I think it’s important to meet with your advisor at least once per year to review how your investments are distributed, performance and to build a relationship.  So, thanks to Redeeming Riches for the reminder and the 5 tips to winning the race.

Clean up 401k accounts

Along the retirement subject, I learned a good tip from The Digerati Life this week about doing some housekeeping for your 401k accounts from past employers.  If you’ve had several different jobs and associated 401k accounts in the past, think twice about leaving them open with those companies.  Given the current economic climate, you may want to get the investments to safe ground because you don’t know the long term future of companies today.  Rolling them over into an IRA under your control, or your financial advisor’s watch is a smart plan.

The 10 Day Give

Yahoo!  No, not Yahoo!, but YAHOO it’s the 10 Day Give kick off at Christian PF!  Bob is quite excited as many others who have signed up for this 10 day concious effort to give of your time, money or talents to those around you in need.   Why should you sign up?  Here’s what Bob says.

The purpose behind the 10 Day Give it is to give people an opportunity to:

Make the world a better place one gift at a time

Change the lives of those around you

Change your own life by better understanding the joy of giving

I can’t tell you how much I support this effort.  Giving has truly been a blessing in our lives and I know you will find it to be the same for you.  There is a real reward when you give of yourself to help another, so take the extra time each day to think about how you can help someone, if not monetarily, in just giving them a hand.  How do you sign up, Bob?  “It’s easy, and will take less than 10 seconds! Just go to the 10DG homepage to sign up!”

Great Ideas for Giving

Speaking of giving, are you trying to think about how you might give for 10 days in the 10 Day Give?  There are those who seem to have a real talent for brainstorming a list of great ideas.  Money Help for Christians is in the giving spirit this week by giving us a list of 101 giving ideas.  What’s your assignment after signing up?  Head on over and review the list of ideas and identify the ones that seem to resonate with you the most.   Here are a few that I liked.

Purchase an extra movie ticket and give it to someone just because.

Make a contribution to your local church.

Offer to buy a meal for a stranger.

Did you read other personal finance articles around the blogosphere this week you liked?  Share them with the One Money Design readers in the comments.

Image by popofatticus and Mzelle Biscotte.