Have you pruned your personal finances lately?

iStock_000008323137XSmallHave your personal finances become overgrown?  Does it seem like you can’t get your personal finances under control?   Do you have a hard time keeping track of all of your banking and investment accounts?  Are you overwhelmed with all of the financial information you hear everyday and don’t know where to start?  Have you ever thought about pruning your personal finances to help them grow?  Why not?

According to Wikipedia:

Pruning is the practice of removing unwanted portions from a plant, but may also refer to:

  • Pruning (algorithm), a method of simplification of a decision tree
  • Pruning (microeconomics), the removal of “excess” items from a budget

Pruning your personal finances will help you get rid of the unnecessary or excess  that make your personal financial life more complex.  Pruning will help your personal finances grow and expand as well as help you  simplify your financial life.

Here are four financial task you should prune if you want to simplify your finances:

Prune your accounts – To simplify consider pruning your banking account and investment accounts.  Do you really need more than one or two bank accounts?  Think about the time you would save by not having to keep track of multiple bank accounts.  Reducing the number of accounts you have enables you to do a better job of tracking your spending and savings.

Reduce your investment accounts.  Do you really need multiple brokerage accounts with similar assets in them?  Put all assets into one account if you can.  (You may not be able to combine your some retirement accounts).  Having less accounts enables you to monitor your assets and have a better understanding of your overall investment performance of your assets.

Prune your financial information – Where do you receive your financial information from magazines, news, radio, or your financial advisor?  Receiving multiple messages from multiple sources can be overwhelming at times.  Many times you are not sure what advice to follow.  The best way to reach your goals and objectives yu set is to limit your information or trim back the sources of information you receive.  Find couple of sources you find reliable and that fit with your goals and objectives and stick to them.  By doing this you are able to process less information and then make  quicker decisions that help you accomplish your goals and objectives.

Prune your debt – Do you feel tied down and unable to move forward because of the amount of debt you have.  Develop a plan to reduce or eliminate your debt.  You have to find what system works best for you.  By pruning your debt it will allow you to grow financially and increase your net worth.

Prune your spending – Are you spending more then you earn each month?  Are you living pay check to pay check each month wondering where your money has gone?  Review your spending and determine where you can cut back.  By doing this you will enable you to grow your savings or have some extra cash each month.

By pruning these four components of your financial life you will be able to improve your personal finances as well as create a simplified financial lifestyle.  So take action now by reviewing your existing accounts, debt, spending, and financial information sources.

If you are looking for additional ways to simplify your financial lifestyle make sure you sign up for my email newsletter and receive a 14 Day e-course to help you simplify your finances.  Remember take it one step at a time to simplify.

Eliminate your Banking Fees with these simple tips

Are you tired of those monthly banking service fees?  Do you dread seeing that monthly service charge on your bank statement? Do you ask yourself why do I have to pay a fee to keep my money in the bank?  Don’t you wish you could get your banking for free or deserve free banking for being a long time customer.  Here is how you can make that wish come true of completely free banking or at least reduced fee banking:

Eliminate the ATM fees – Tired of those non-bank ATM charges showing up on your monthly statement.  Review your ATM usage.  Are you using the first ATM that you see or the most convenient one which unfortunately is not your bank’s ATM.  To eliminate the non-bank ATM fee only use your bank’s ATM or ATM network.  You could also withdraw money from your local store that accepts debit cards.  No fees associated with cash back when you make a purchase.  Also for more tips on how to eliminate the non-bank ATM fees read  6 Ways to Knockout ATM Fees.

Prevent overdraft fees – Do you have a tendency to overdraft your account every once in awhile which result in overdraft fees?  Establish overdraft protection for your primary account by linking it to a saving account or a credit card.  Some banks may still charge you for using the overdraft protection but it will be less expensive than the NSF charge by your bank as well as the merchant.  The best way to eliminate those pesky overdraft charges is to set up an alert on your account bank account to alert you that your account has reached a minimum balance that you have established.  For example you may want to keep a couple hundred dollars as cushion in your account so you do not overdraw your account.  Then set up an alert to notify you when your account has reached your predetermined cushion level.

Avoid those monthly service fees – These fees can usually be avoided if you keep the minimum account balance in your account.  To do this you want to know up front what the minimum account balance is so you can maintain this balance to avoid incurring the monthly service charge.  If you have multiple bank accounts consider consolidating them so you can maintain the minimum balance to avoid the monthly service charge.  Also if you have multiple banking relationships consider consolidating them to your main bank this way you can avoid the monthly service fee.  Also read my post Things to Consider when Opening a Bank Account.

Avoid wire fees - Do you wire money every time you need to send money?  If you are just sending money to a friend, relative or paying a bill, you easily send it by automatic clearing house (ACH) instead of wire without the fee.  Unless the money is a significant amount for example to make a large purchase and you should send by wire to make sure it was delivered and it can be tracked.

Avoid check fees - Are you tired of paying for checks?  Stop writing them.  You ask how will I pay my bills if I can’t write checks?  Easy either have all of your bills paid by credit card or sign up for online banking bill pay service with your bank.  See post Who Else Wants to Save Time and Money.  Using either of these methods to pay your bills will not only eliminate the need for checks it will also simplify your personal finances.

So the next time you open your monthly bank statement and see one of these fees on your statement remember these five ways to eliminate or reduce those fees so you can simplify your personal finances as well as stop giving your money away to your bank.