“When you simplify your financial picture, you are loving and serving your family well.” -Emily Ley, A Simplified Life
Well, when you put it that way……….
Money is so tricky. It’s at the root of so much what goes on in our daily lives. And we’re not born knowing how to handle it. Many of us (me!) were never taught how to handle money and had to learn some lessons the hard way.
No matter what your history is with finances, you can start making healthy financial decisions today. Decisions that serve you and your family well.
5 Steps to Simplifying Finances
1 – Become a Numbers Person
This isn’t an area of life where not being “good” at something is an excuse not to do it. Adult up. Learn the ins and outs of managing your finances.
Start with the glossary of terms she lays out on pages 83-84, then talk to a professional who is good at this stuff. We’ll talk more about that in number 3.
2 – Implement a Family System That Works
Find a system that works for you. What have you done in the past? What worked? What didn’t work? Built off of that to figure what you need.
Through our seven years of marriage, we’ve had a few different forms of a budget.
In our early days it entailed a whiteboard in our kitchen. We were both paid monthly, so we’d pay all of our bills, then whatever amount was left was written at the top of the board. As we spent, that amount got subtracted and when it got to zero, we knew there was no more spending until the next paycheck. How quaint is that? Now we use a spreadsheet with columns, equations and color codes.
Whatever system you choose, who does what has to be clearly defined and well-communicated. One of the many financial lessons I’ve learned the hard way…..
Now, my husband is paid weekly – every Friday. So, on Thursday night, we sit down in front of that beautifully color-coded spreadsheet and talk through that week’s payroll. What bills are due that week, extra expenses that have come up, where to designate giving and what to do with the extra (I wish this was a conversation had more often than it is…..). Neither of us look forward to it. Or enjoy it. But it is necessary. And it has been a game-changer in our house for understanding our financial state.
3 – Find a Trusted Advisor
Shortly after getting married, my husband and I bought a small life insurance policy. We felt so responsible. A mere three years later, upon reflecting on that policy, we realized that it was not even close to what we needed. In those three years, we had purchased a different home, had two children and I was no longer working full-time.
We met with an advisor that my husband has known most of his life. We had to have the humility to say “I don’t know anything about any of this. Teach me.” It’s a hard pill to swallow, but it was one of the best decisions we made.
4 – Decrease Debt
I like thinking about debt like clutter – that it is junking up our lives. Debt is exhausting and emotionally and mentally draining. And yet, so many of us have it. A lot of it.
Choosing to be debt free – and making the lifestyle choices that get you there – is incredibly hard. We are in the midst of it now, and it is a daily battle.
I want all the things. And with the click of a couple buttons, I can have them on my doorstep in a matter of days. Temptation is lurking everywhere.
But there is a better way to live. The sacrifices and the hard choices are worth it.
5 – Use One Method for Expenses
We think we’re better at multi-tasking our spending than we are. Whatever method you choose for paying expenses (we have found that cash is best), find one and stick with the same one. Simplification is the goal here, and this is the epitome of simplifying.
Honestly, this is an area where I feel completely inadequate to give any kind of advice. This is a real struggle for our family. But we desire to do this well and we’re working through it. It ain’t pretty, but we’re getting there. One small choice at a time.
“No matter how much money you make or how much have in the bank, finances are stressful.” – Emily Ley, A Simplified Life
Read some of Emily Ley’s money saving tips here.
At the end of each chapter, Emily Ley has a ‘Simplicity Challenge’, which are 5 steps that you can do right now that make big strides toward achieving your goal.
Comment on each blog post with the number of simplicity challenges you completed that week. I will track each person’s progress (this is a total honor system thing) and the person with the most challenges completed at the end of the book will get some swag. Like good, helpful swag. No clutter-y stuff.
Don’t forget to take photos of the process AND the progress and use #simplifiedsummer so we can all celebrate together!