Where is your money
You may have noticed a couple links on the homepage that go to websites about money (Early Retirement Extreme and Diva Money Club*). If you check out the About section of this blog, you’ll see that stylish minimalism includes all areas of life: environment, career, finances, health, family, friends, romance, personal growth and recreation. You can apply minimalism to your finances, bringing peace and joy into your life. Today I want to talk about where to start.
I won’t be convincing you to move all your banking online — that’s a personal preference.
Where is your money?
Applying minimalism to your finances is similar to the way you apply it in other areas of your life. There can be clutter of information, bills, statements, e-documents, cash, cards, cheques, receipts, accounts…. and so on. Where are yours? Do you have coins in ten different piggy banks? Receipts bulging out of drawers? So many accounts you can’t remember them all? Do you know where all your finance information is and can you access it timely?
Whether something is for reference or for action, knowing where it is and being able to easily access it is going to make life easier.
Rich people, poor people, people in debt and everyone in between should know where they are, financially. You don’t have to keep a fancy book or spreadsheet. All you need is to know the locations and amounts of your money (incoming and outgoing). And let the clutter go.
Why is it important?
Once you have minimised, there won’t be frantic scrambles or duplication. Just having the clutter gone can save money. And once you know where things are, you can make a plan for improvement – whether that be to get out of debt or to get richer. Knowing where your money is saves you time to access, it saves you money with no late fees, and it allows you to plan. You cannot plan how to reach a destination if you don’t know where you are. You cannot meet deadlines if the information escapes you.
How can you do it?
Please note, I am not a financial adviser. But as a minimalist, I suggest keeping a master list of accounts. You can keep it at the back of your address book, in an online text file, in your head… as long as it is a defined list. A nickname and number for each account should be sufficient. To make sure you’ve got everything on the list, you can leave it out for a month and add to it as you use your money.
- Make a master list of all accounts. Note them as paper bills, online access, accounts with a card, etc.
- Gather all papers around your house, bags, car, office, wherever.
- As you find new accounts, add them to your list.
- Recycle, shred or otherwise get rid of papers you no longer need. The bank can always send you replacements if you need them. Read your latest account agreement then recycle it. You do not need your bank’s fee change notices from the last 10 years!
- File, if needed. If you like, you can track most things online and only keep the odd paper statement (or scan it and throw the paper away).
- Keep the list so you can update it as accounts change, and refer to it as you work on your financial plan.
If you’re underwater or have been spending without budgeting, this may be scary. Please don’t be scared. You don’t need to change your financial behaviours right now. We’re just finding out where everything is.