Streamline Your Finances in 2020

A new year is upon us — and a new decade is upon us. With the New Year comes new goals, new directions, new purpose, and hopefully a streamlined approach to achieve these targets in the coming year and the coming decade.

After the champagne clinks and “Auld Lang Syne’s” there are usually some New Year’s rituals and to-do’s that are checked off in the first week of January. Taking down the tree and the lights, a little winter cleaning, making a resolutions list, and hopefully turning our attention back to work and especially our finances.

Americans spend almost three hours per week managing money, according to GoBankingRates. Unfortunately, most of us still report feeling stressed about money at least some of the time, and close to one-third of Americans report feeling stressed about money all the time. 

Here are some things that can be done to alleviate that stress and streamline your financial wellness in the coming year:

Consolidate

How many different brokerage accounts, checking accounts, 401(k)s, and credit cards are you keeping track of? Staying up-to-date on all of this can take forever. Checking balances means logging into multiple online services. Diversifying investments can be tricky since it is hard to keep track of what is in which portfolio. Oh, and how do you remember to pay all those different credit card bills on time?

Unless you have a personal finance manager, these activities can eat up your time and can be the source of untold stress. Moving investment accounts to one broker, scaling down to just one checking account and a few high-yield savings accounts for different goals, rolling over old 401(k)s, and picking one great credit card that provides tons of cash back are all things can make keeping track of your accounts seem effortless. There are only a few to monitor, and they're almost all with one financial institution.

Debt

If you're in debt, your financial life is always going to be complicated (and most likely stressful too) — so make a plan to pay off what you owe as soon as you can. While paying mortgages and student loan debt off early doesn't necessarily make sense because these debts usually have low interest rates and come with tax breaks, not to mention the fact that the balances are usually higher than most other accounts, getting rid of all other consumer debt is the best thing you can do for your finances. Not only will you free up more cash for other things, but you'll also have fewer payments to worry about and won't have to work debt repayment into your budget.

Since it can still take months or years to become debt free, think about consolidating and refinancing debt. If you can get a new personal loan to pay off all your credit cards and other consumer debt, you may be able to reduce the interest rate you're paying and simplify your life to just one loan payment to keep track of.

Transferring credit card balances on high-interest rate cards to one with a lower rate may help you consolidate your monthly payments and save on interest. Once you’ve done that, if you’re worried about using the cards again, shred them rather than canceling them. You’ll still have the credit line in your name, but you won’t have the temptation in your wallet.

There are many different ways to prioritize and streamline your financial goals. Give some reflective thought to what you want out of life, and streamline your efforts towards achieving your goals of financial independence and wellness. 

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.