This morning, I explained how you could do a hard reset of your financial life . In a hard reset, you start from scratch and then mold your financial map until it fits that ideal financial map. With incremental simplification, you don’t really do any pre-planning or large scale remodeling of your financial life, you just take one step each week towards a simpler system.
One of the best aspects of this style of simpliciation is that it’s very easy. Just a couple small things each time and before you know it your financial map will tidy and clean. Since it is so easy, it’s more likely you’ll succeed in simplifying your finances, so let’s take a look, shall we?
How To Simplify Incrementally
Take out your financial map and start looking for easy ways to consolidate and cut. Here are some ideas:
Find duplicates. I talked about how we had 12 bank accounts. We have so many because we could open a new account for free, I would review it for this site, and then we’d start putting our savings into it. We did this because new banks often offered high interest rates. We wouldn’t transfer funds from one online bank to another, because the transfer time would negate the interest rate benefits, so we slowly acquired accounts. Finding duplicates and consolidating them is the easiest way to simplify. Find the lowest interest rate bank and transfer the funds to the highest interest rate bank. Easy win.
Find obsolete and unnecessary accounts. An obsolete account is one that no longer has a purpose. When we replaced our windows, we took advantage of a 6 month same-as-cash financing offer. It was a line of credit with GE Money. After six months, the account was obsolete but I didn’t realize I had to actually close it. It wasn’t until I saw it actively listed on my credit report did I call and have it closed.
Find a better replacement. While this was the logic that led me to 12 bank accounts, it’s better applied to other financial accounts. If you aren’t getting free checking, you should go to a bank or credit union that will give it to you. If you’re paying $20 a trade, you should be going with a better online stock broker  that charges you less than twenty bucks.
Do you have any tips for how to simplify your finances?