Managing money is riddled with complexities and uncertainties, and we tend to forget how easy it would all have been if we only did and saw things simply. The best things in life are always free and simple! This episode covers the what, why, how, and barriers to simplifying our finances, ALL SIMPLIFIED AND FREE!
- Sneakers. A weird word if you think about it, but a great shoe! These are the kings and queens of footwear. Going for a walk? – put on a pair of sneakers! Gonna speed up that walk and call it a run? – put on a pair of sneakers! Just grabbing a few things at the grocery store? Sneakers!! You get the point. They ARE shoewear simplicity. And speaking of 1 item that fits all occasions…the friendletter! It’s a newsletter from us sent to your inbox 3 times a week for free! Want to know what you can get for free this week? – take a look at the friendletter! Want to know how to save on your biggest expenses? – take a look at the friendletter! Want to feel seen, validated, loved, encouraged, and smart about your money? – THE FRIENDLETTER!! You get the point. Sneakers and the friendletter are great. frugalfriendspodcast.com/friendletter
What do we mean when we talk about simplifying our money?
Nobody thrives in chaos, even if we often get drawn to it. No one ever wants chaos to take place in our reality, especially in our finances. Simplifying our money is ultimately the opposite of chaos—the ability to manage money in a “set it and forget it” approach where we feel confident about it and are good stewards of our own money and resources yet also have the ability to move on and enjoy the rest of our lives. Recognize the connection between simplifying our money and other aspects of our lives, such as our space, schedule, and choices and mental capacities.
Simplicity implies approachability and attainability, which for a long time has not been the case with our money. The idea of simplicity pushes back the idea that the more complex means it’s effective, but not knowing our values or what we truly want out of our money and life is what causes our finances to feel chaotic. While simplicity and minimalism are synonymous, they’re vastly different, as minimalism isn’t always about simplicity. Getting to a place of simple money management so that when complex situations come up, you’re better equipped to manage them from a place of strength and confidence instead of stress and anxiety.
The first thing to know is to start small! It’s difficult to want to simplify but then want to do it all at once. Go back to your 90-day transaction inventory, then choose one thing to simplify—find one area and the small change you can make within it. With your income, you can look for ways to simplify the money you bring in (it doesn’t mean less; simplifying does not always mean less), such as going through complicated tax situations, evaluating your time for money, and considering the intersection of your joy and skillset. Try the 80/20 rule in your side hustle/business or look into a new job. For expenses, we always recommend putting as many bills on autopay and doing a review of your subscriptions. Also, investing for retirement in which we have delved deep in Simplifying Investing For Retirement on Ep 180 – Minimalist Investing.
Barriers: What gets in the way? What are the barriers to simplicity?
There are unavoidable complex seasonal situations or circumstances that may arise, like divorce, five years before you retire, or a death in the family—short-term seasonal situations. For these cases, consider getting help from professionals or those who are not involved in said situations. There are also financial planners and predators, which will make you think managing money is complicated. Remember that complexity does not equate to effectiveness, but sometimes we can also make things complicated when we try to do everything on our own. Identify when it is time for you to take certain responsibilities and actions for your money, how you can simplify them, and when it is the right time to ask for help from someone else.
How do you streamline and reduce the time it takes to manage your money?
Both Jen and Jill automate their payments. Jen simplified her banking methods; does travel hacking, and made a one-time lump-sum contribution to her 529 plan. Jill has no more than two credit cards as she wants a lifestyle where her life is simplified so her expenses are significantly less than they earn.
Bill of The Week
Thank you Emily for sharing your bill about your home insurance (congrats on buying a house!) – getting an $834 refund!
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