In order to simplify your personal finances, you must identify your financial ugly ducklings and turn them into financial swans.  What I mean by this is if you want to simplify your financial life so you can manage your finances better you must identify your bad financial habits which I refer to as your ugly ducklings and take action to turn this bad financial habits into a positive financial situation or what I refer to as financial swan.

Here are some ugly ducks you can turn into swans which will help you simplify your personal finances:

No financial goals – You have no long-term or short-term personal finance goals.  If you establish goals you can simplify your personal finances quicker.

Not living on a budget - You do not set a monthly or annual budget.  You are just spending money without setting limits.  Establish a budget will enable you to reach your financial goals you set and help you take control of your finances. Gazelle budget is a simple solution to help establish a monthly budget.

Not planning for the unexpected – You do not have an emergency plan in place in case of an emergency.  Establishing an emergency fund is like the goose that laid the golden egg when you are finances are in a bind due to an unexpected situation.

Not planning – You have not planned for the expected things that you know will happen in your life.  Read this to find out what you can plan for.  Establishing a plan for those expected financial situations will take the pressure off of you and your finances because you have planned for them in advance.

No estate plan – You have no plan in place to handle your assets upon your death.  Read this if you do not believe you need a will.  You do not know when it will occur but you can plan for it.  Establishing a plan prior to your death is much easier on your family.  You may not see the benefit but your family will definitely benefit and save some money in the process.

Too many credit cards – You have more than 3 credit cards with balances on them and you do not have plan in place to reduce your debt.  Read this to make sure you are practicing safe credit card usage. Reducing the number of cards you carry and the outstanding balances on them will simplify your personal finance.  This is one ugly duckling that you must turn into a swan rather quickly.  If not it can get uglier rather quickly.

Not automating – You are still not using online banking, still cashing your payroll checks, or mailing you bill payments.  Establish online banking which will enable you to pay your bills on line.  Setup automatic deposit of your payroll checks to simplify your finance and save you time.

Too much paper – Is your mailbox screaming for relieve because you receive so much mail?  Go paperless is more convenient  and will save you time.

Forgetting due dates – Do you seem to forget the due dates of your bills or just forget to put the bill in the mailbox.  Setting up your bills on your credit card or bill pay service will help you eliminate forgetting to pay your bill on time as well as save you from paying those late fees.

Living beyond your means - Trying to keep up with the your co-workers, neighbors and friends is causing you some financial stress but having the latest or newest whatever is more important.   Stop trying to keep up.  It will reduce your stress and enable you to live a healthier and wealthier financial lifestyle.  It will trust me.

ACTION STEP

Take some time to review your current financial situation and identify your financial ugly ducklings and take action by turning the ugly duckling into a financial swan.  Just like a duckling will not turn into a swan over night is the same with your personal finances.  You must take one step at a time but if you take action I am sure your ugly duck will turn into a swan quicker than you planned.

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If you enjoy what you’re reading and want to stay up to date on the latest posts please make sure you follow me on Twitter and subscribe to my RSS feed. If you are serious about simplifying your personal finances also subscribe to SIMPLE FINANCIAL LIFESTYLE NEWSLETTER.

If you want to simplify your personal finances, we have to give up somethings or break old habits. But by giving up old habits, we can make our financial life simpler, however, we don’t always see it that way. We want to continue to do things we have always done them but expect our financial situation to change. It does not always work that way so if you want to simplify your finances are you willing to give up somethings you believe you cannot seems to live without.

Here are somethings you will have to give up in order to simplify your finances but I am not sure everyone is willing to give these up:

LICKING STAMPS
I know you like the taste of the stamp glue and the continuing raising the stamp price but you must stop licking if you want to simplify your finances. You may have an addiction but I am sure you can overcome it. You must give up the stamp licking because you will not have to mail your bills. To simplify your personal finances you will have your bills paid directly from your bank account or directly charge your credit card. I don’t recommend going cold turkey on the stamp licking. I know it is a hard one to get over so slowly reduce the number of stamps you have to lick over the next few months.

RECEIVING MAIL
I know you find pleasure in going to the mail box everyday to see what bills or junk mail the mail carrier has delivered. You will have to give this up because all of your bills should be received electronically if you want to simplify your finances. It may take sometime to get over going to the mail box but I am pretty sure you can handle not going.

PAPER CHECKS
Many of us enjoy writing out that check to purchase items at the store and to pay your monthly bills. If you plan on simplifying your finances you must be willing to leave those paper checks at home. You should instead pay your monthly bills with your online bill pay service or use debit card, credit card, or cash to make your purchases. There are several reasons while these other methods of payment are better than paper checks.

THAT OTHER BANK
I know its easier to just go to the ATM that is closest to you even if its not your primary bank. Its always easier to pay the transaction fee instead of using your bank and not have any ATM fees. If you want to simplify your personal finances you must give up one of those banks. You are not benefiting from using another bank if you are just using it for convenient purposes and paying a fee for the convenient. Decide which bank provides you with the services you need and dump the other one. It’s easier to open another account because they offer a higher rate.

3rd or 4th CREDIT CARD
I know your wallet will become depressed if card #3 and #4 are no longer members of your wallet club. You enjoy using card 3 and 4 when card 1 and 2 have reached their limit. Card #3 and #4 come in handy when you are in a bind. If you want to simplify your finances your wallet will have to get over the lost of card #3, #4, and even card #5. To simplify your finances your goal is to eliminate as much debt as possible. By not have those cards you can focus on eliminating any balance you may have on them. Two cards should be enough to manage your finances.

REGULAR BANK VISITS
I know you enjoy social hour in the teller line and seeing that bright shining face in the drive-thru but if you simplify your finances you can eliminate your time at the bank. Simplifying your finances means you sign up for online banking and you have your payroll check deposited directly into your bank account. This will allow you to eliminate those trips to the bank.

STRESS
I know many of us stress over our personal finances because we have not simplified. If you simplify your finances you can reduce your stress level because your finances should be organized, payments should be automated, you should have a plan in place to reduce your debt, and you should be living within your budget or spending limits. Having these in place will eliminate or reduce your stress level.

Now is time for the truth can you live without these things so you can simplify your personal finances. If so, its now time to TAKE ACTION. Decide which of these you can live without and put an action plan together to simplify.

Remember take it one step at a time in order to simplify your personal finances.

Automating your personal finances is key to simplifying your finances. It is what I recommend to everyone. Automating makes things a lot easier as well as enables you to spend less time sorting your mail and paying your bills and more time doing the things you want to do. Yes automating your finances will change your life forever but you can not just automate and forget about your bills. Well you can but you may discover some additional charges several months later or worse you may end up having some services disconnected if you forget. I am not saying do not automate your finances but I am saying you want to put some checks and balances in place to monitor your finances to make sure everything is working as planned. Here are some things you want to put in place to make sure everything is working properly when you automate your personal finances.

REVIEW YOUR STATEMENTS – reviewing your monthly statement to make sure the bill payment was received on time and you did not incur any late fess. Also want to make sure the payment date you established for the payment to go out provides enough time so it is processed on time. Many times we just pay the bill since it automated without reviewing the bill. After its paid its to late to dispute but you can always try.

REVIEW PAYMENT WAS MADE – Check to see if the payment is sent out or if your credit cards was charged on the day that you designated. To do this set up an alert or set a date in your calendar to view if payment was done. One way to make it simple is to try to set all payments to be sent and charged to credit card on the same day or within a few days of each other if possible. This way you will only have to check once per month to make sure all payments were made.

CORRECT AMOUNT CHARGED – Not only do you want to make sure the payment was sent or charged, you also want to make sure the correct amount was paid. You would hate to underpay your bill and be charged interest or possible late fees.

Automation is key to simplifying your personal finances but supervision is even more important. So establish a checks and balances system to make sure all of your bills are paid as you have set up. This will save you time and give you a peace of mind knowing that your bills are paid and you only have to check to see that they were done once a month.

I recently posted Who else wants to simplify their bill paying? discuss how to set up a simplified bill paying system.  Now would like to show you how you can automate your bill paying system to make it easier to simplify your personal finances.  Here are five ways you can automate your bill paying system and eliminate the need to write checks which can save you time and money.

Use bill pay service – Sign up for one of the many bill pay services now available to help you with your bill paying.  By using bill pay service, you will eliminate the need to sit down with your check book and write out those monthly checks to pay bills.  By using bill pay service you can almost eliminate your check book for good.  Check with your current bank first to see what bill pay service they offer you as an existing customer.

Set up alerts and reminders – Begin using a reminder services or set up your own personal reminder service with an online calendar such as Google calendar.  Use the calendar to remind you when the bill will be due or remind you to make sure the bill payment service your using has paid the bills you have set up.  Using reminders and alerts, you eliminate the chance of you forgetting to make payment.  Setting these alerts up properly there will be no more excuses for those late payments.

Use credit card – Have your bills charge directly to your credit card.  By using credit card you will not have to remember to pay multiple bills.  You will only have to remember to pay one bill which makes it easy.   You also will not have to worry about your payment being delayed in the mail because payment will be charged to your credit card.

Use auto debit -If your not comfortable using your credit card to pay your bills, consider having your bills auto debited from your bank account.  Using auto debit as your method of paying bills, will eliminate the need to write checks as well as stress worrying if payment will arrive on time.

Eliminate your paper statements – Now that you have eliminated the need to write checks to pay your bills by using credit cards, bill pay service, or auto debiting your bank account your still spending time every month filing away those paper statements.  If this is the case, you can eliminate the paper statements by signing up for paperless statements.  Instead of receiving your monthly statments by snail mail, you will receive your statements by email.  This will hopefully eliminate the need for you to spend time manually filing away those paper statements.  If you want to keep copies of your statement set up files on your computer to maintain these statements.

By implementing these simple tips, you can save yourself valuable time each month.  Instead of paying bills you can spend those extra hours doing something you enjoy.  Also doing this will make your life less stressful since you are not worrying if a bill was paid or rushing to post office to make sure your payment will arrive on time.  So take action by implementing one of these five tips so you begin to live a simplified financial lifestyle as well as save time, money and have less stress.

Which of these five tips have you implemented to simplify your bill paying process?