As a mother of a two and half year old toddler, carving personal time outside of work is hard enough, let alone making time to sort out my personal finances. This is why it is important to simplify your finances to save as much time you can.
Have an account for savings and an account for spending
Have your salary credited into a savings account every month. Then transfer a percentage of the salary to another account for spending. By doing it this way, you are sort of creating a budget that you can spend only from the spending account.
This will allow you to differentiate what money is for spending and what is being saved. One other tip that I use is, for my savings account, I don’t have an ATM card. So I can’t withdraw money from it.
You can also do this with only one account if you have the OCBC 360 account (I’m not sure if other banks has the same function). Within the 360 account, you can define saving goals. E.g I can define that I want to save $10,000 in 1 year. It will calculate that you will need to transfer $833.33 every month for a year to hit the goal. I can then set up to transfer this amount on the day my salary is credited in. Any money in these goals (I like to think of them as sub accounts) cannot be withdraw, unless you manually withdraw the money from your goal back to your main account. You can create multiple saving goals for different purposes.
Automate your finances
This is one that I highly recommend doing if you can’t do anything else. Remember the above example to transfer a percentage of the salary to another account for spending. Don’t do this manually, setup a recurring transfer every month one day after your salary is credited. By doing this, you have just created a budget automatically.
It’s the same story when it comes to investing. My preferred ways is to invest using a regular savings plan or a robo advisor or both. You just have to setup these once, and the money will be deducted automatically. By doing this, you are investing every month with no emotions tied. You don’t have to do stock picking, time the market etc…
Even with bills, you can set up recurring bill payment. With this, you won’t forget to pay your bills. The only downside to this is, you might not notice immediately when you are being overcharged.
Use only one credit card
When I first started working, I had a lot of credit cards. But I found it difficult to keep track of which card I have to make payments on.
By consolidating your spending on one credit card, it helps to keep track of where your spending went, and you only have to remember to pay bills for one card. This way, there won’t be any late charges.
By using only one card, you will also be able to take advantage of the reward system, as you will most likely earn your rewards faster, therefore remember to redeem them.
Also I found that by using only all your spending on 1 card, it is easier to get a annual fee wavier without hitting the min spend rate.
Subscription for things you enjoy
I know this sound weird as a way to simplify finances. For example, I enjoy brewing my own cup of coffee, more important now during this lock down period. I also like listen to music or watching movies or series as a way to relax.
I subscribe to freshly roast ground coffee every 3 weeks so I do not need to go to a coffee place to buy. I subscribe to Netflix and Spotify because I need my dose of entertainment weekly. By doing these, I get the things I enjoy at my finger tips. And since payment is automatic, I don’t have to worry about making payments manually.
These are some ways that I have personally done to simplify my finances, and hopefully it will help with yours too.
