Reduce Financial Stress, Simplify Your Personal Finances

by Connor Groening

in Guest Post, Mindset

Stress is a physiological response. Whenever your brain senses stress, adrenaline and cortisol are activated to raise your awareness and energy. However, not every stressful situation requires you to fight or flight. For example, financial stress is often a debilitating mental burden that reoccurs in a chronic manner. Yet there’s no need for your body to fight against a mailed-in bill and running away certainly won’t help, but your brain is still able to understand the consequences of financial problems. Fortunately, extensively reviewing your financial situation and simplifying as much as possible can drastically reduce financial stress.

The Benefits of Organization

Organization is one of the primary elements of successful finance management.

In our case, this means the organization of every aspect of personal financing. The idea is to organize cluttered finances and simply things during the process. Categorizing all personal finance files does this. For example, you’re likely going to use the following categories:

Tax files and returns
Investments and retirement
Credit cards
Home
Insurance
Savings and checking accounts
Car and other bills

Initially, it’s ideal to organize these categories using folders and a bin. Sub sections reserved for invoices, outstanding bills and receipts can be created for further simplification. To reduce even more clutter, it’s possible to scan your files categorically save them onto your hard drive to create a organized digital record.

Embracing Technology

With organized personal finances, you’ll at least know where to store your bills and files as your hair turns grey from stress. Now, to actively combat personal finance stress and continue your crusade of simplification, it’s time to embrace technology by learning and using a personal finance software program.

The latest editions of residential-level finance software programs are packed with stress reducing features such as the ability to keep track of checking, savings and credit card accounts linked directly to your online bank as well as PayPal accounts. Budgets can be easily created and manipulated to help you find the most optimal compromise between finances and lifestyle.  Most also include various financial calculators to give you a clear picture of your mortgage or home refinancing options.

Assimilate or Eliminate

By now, you may have organized your personal finances and simplified things with the help of a personal finance software program, but you still have to continue the simplification process by cutting out the excess and solving two problems with one solution.

Look through your investment and retirement portfolio. Have multiple 401k accounts or one too many mutual funds? It’s likely time to roll it all over into a solitary IRA account and cut down on the investments until you’re only left with your prime mutual funds to manage. This process of simplification through assimilation should also be exercised on your insurance finances and telecommunication bills. By purchasing auto and home insurance from one provider as well as opting for a bundled telephone-Internet-television package from a telecommunications company, you’ll minimize the number of bills to keep track of while likely enjoying a small discount.

You may also find it necessary to simplify through elimination. This is particularly useful for bank and credit card accounts. Pay off the balances on those credit cards you hardly ever use because one or two credit cards for small and big expenses is often more than enough. Similarly, there’s often little need in keeping more than one checking and savings account open. It simply leads to more paperwork management, which is exactly what the simplification process is designed to combat.

There’s no telling how much money, time and strands of hair you can save by simplifying your personal finances to put an end to chronic stress. It may seem difficult to get started, but the stressful day-to-day burden of dealing with cluttered personal finances is ultimately more debilitating than simply working through the process of simplification.

This is a guest post by Connor Groening. He is freelance writing who’s main objective is to educate individual on how to be financially smart. He can be reached at connorgroening@gmail.com if you have any questions or would like to contact him.

{ 2 comments… read them below or add one }

Roger Wohlner

Outstanding post, good advice for all!
.-= Roger Wohlner´s last blog ..Target Date Funds-A No Brainer =-.

Derek

Don’t organize for yourself, organize for your spouse and loved ones. If something happens to you, are they going to have the information they need (easily accessible) to continue to survive? I have it all in an easy binder that includes not only the finances, but also has your estate plan and your personal letter of intent. The benefits can be enormous.

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