Have 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.