11 Pointers to Investing in Your 60s and Beyond

Investing in your 60s is a different ballgame than when you focused mostly on growing your retirement funds. When you crack into your retirement nest egg, you need to change your investment strategy. The idea is to withdraw enough to help you get by now while holding enough in reserve to finance the rest of your life.

Making the transition to investing in your 60s and beyond requires a new way of thinking about investments. Here are 11 pointers:

1. Estimate how long your savings must last

You can’t plan effectively without an idea of how long your money should last. Of course, you can’t know how long you’ll live, so we’re talking here about estimating the longest you might live so you won’t run out of money.

A 65-year-old woman can expect to live to nearly 87, and a man the same age will live, on average, until 84, says the Social Security Administration, whose Life Expectancy Calculator gives a rough idea of expected lifespans. Or use the Wharton School of Business’ Life Expectancy Calculator for a more specific estimate based on your answers to questions about behavior, family history, and health.

2. Calculate annual expenses

To plan your finances in retirement, you’ll need to know how much you need to live. Especially if money is tight, you’ll need specific spending data, not estimates. If your budget and have tracked your spending, you’ve got the data you need. If not, start now. Automatic tracking is simple with free tools like one from Money Talks News’ partner PowerWallet. But a notebook or spreadsheet, to name a couple of alternatives, also will do — as long as you keep it up. After tracking for a few months, you’ll begin to see where your money’s going and can decide how much to withdraw from investments.

3. Fully fund emergency savings

Keeping a cushion of savings in cash or short-term CDs lets you ride out market downturns without selling stocks at low valuations. Some experts advise having an emergency fund to support yourself for a year and a half to two years.

4. Plan your withdrawals

Retirees need a system for regular cash withdrawals. For example, one popular system suggests withdrawing 4 percent of your initial savings balance each year, then adjusting that amount annually for inflation. The creator of this approach, William Bengen, says savings split equally between stocks and bonds should last at least 30 years with this system. While, as he recently told The New York Times, the 4 percent rule “is not a law of nature,” it does provide a framework. The key is to adopt a system, then adjust it as necessary.

5. Seek safety

How much you will keep in CDs, bonds and high-yield savings accounts depends somewhat on how much safety you require. An intelligent risk is necessary with part of your investments if you don’t want inflation to erode your portfolio’s value.

Many retirees follow this rule of thumb (called the “glide-path” rule):

• Subtract your age from 100. The resulting number is the percentage of your investments you should hold in stocks.
• Invest the remaining amount in bonds and money market funds.

If you’re 70, for example, keep 30 percent of your portfolio in stocks, including mutual funds and ETFs, and the remaining 70 percent in bonds.

Does this rule provide enough growth to keep a portfolio going strong? Experts disagree. Writes CNN Money:

[W]ith Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age. That’s because if you need to make your money last longer, you’ll need the extra growth that stocks can provide.

Take a look at the results of various asset allocations at Vanguard’s portfolio allocation models. These illustrate the performance of various stock-bond mixes since 1926.

6. But don’t neglect growth

The other end of the retirement seesaw is the need to grow your nest egg, at least a little.

Unless you have so much money that you don’t need to worry about inflation, you’ll need some growth investments. Usually, that means stocks and stock market mutual funds and ETFs. Learn more about growth investing here: How to Get Into the Stock Market — Safely.

How much of your portfolio to devote to growth? Again, there is no single approach. Travis Sollinger, director of financial planning at Fort Pitt Capital Group in Pittsburgh, tells US News’ Kira Brecht that he advises retirees to allocate 60 percent of their portfolio to stocks and 40 percent to bonds because “your years in retirement will still be significant.”

“If you have a well-diversified portfolio with heavy equity exposure, you should see annual returns of 6 percent, 7 percent or more,” Sollinger says.

7. Plan for required minimum distributions

After age 70 1/2 the Internal Revenue Services requires savers to begin taking minimum annual withdrawals from IRAs, 401(k)s, and other non-taxable accounts into which you contributed funds before taxes. The IRS requires you to pay tax on the income.

(Note: The rules, penalties, and taxes on withdrawals from Roth IRAs are different from regular IRAs and 401(k)s. Be sure to check the specifics of your Roth account.)

These minimum withdrawal amounts are calculated by the IRS based on life expectancy and account balances. The IRS rules are specific and inflexible about how much to withdraw and when. Ignore them, and you could face stiff IRS penalties. For example, if you were supposed to withdraw $4,000 and didn’t, you could owe a $2,000 penalty, writes the New York Times.

Here’s an IRS worksheet that shows when to make withdrawals and how much to withdraw.

8. Keep a lid on spending

Financial discipline is crucial if you are to outlive your money. Take an unsentimental look at your spending, decide how much to withdraw annually from savings and investments, and stick to that plan through bad times and good.

9. Get help now and then

When you manage your own money it’s a good idea to pay an expert for an independent review at least occasionally. Bengen, who came up with the 4 percent rule, tells The New York Times that even he uses financial advisers:

“Go to a qualified adviser and sit down and pay for that,” he said. “You are planning for a long period of time. If you make an error early in the process, you may not recover.”

Hire a Certified Financial Planner who works on a flat hourly rate to review your retirement plan, income, and expenses. A CFP adviser must put your financial well-being ahead of their own.

Money Talks News founder Stacy Johnson discusses when and how to find a trustworthy financial adviser. Consumer Reports tells how to shop for a financial adviser and what their credentials mean.

10. Rebalance your portfolio yearly

You’ve decided what proportion of your investments to allocate to various types of investments but, over time, your investments perform differently, throwing off your original allocation. Once a year you’ll need to adjust, or “rebalance,” your portfolio to restore it to your original allocation choices.

11. Consider other sources of income

Stocks and bonds are not your only investment choices in retirement. Two other possibilities are longevity insurance and annuities.

AARP financial writer Jean Chatzky says that longevity insurance starts payouts when you reach a specified age — 85, for example:

Say at age 60 you buy a $50,000 policy from MetLife. If you live to 85, you’ll start receiving annual payouts of $15,862 if you’re a man, $15,511 if you’re a woman.

No doubt you’ve heard of annuities, which are financial contracts sold by insurance companies. There are several annuity types, as explained in this piece by Stacy: Ask Stacy: Should I buy an Annuity for Retirement Income?

“As with all investments, the more a salesman is trying to jam something down your throat, the more cautious you should be,” Stacy says. If you are considering an annuity, get expert advice, and not from a salesperson but from an accredited financial adviser who charges a flat hourly fee. 

Source: http://www.moneytalksnews.com/11-pointers-investing-your-60s-and-beyond/?all=1

5 Traps that Will Rob You of Your Financial Peace

'There is no trap so deadly as the trap you set for yourself.'

Financial traps lurk around every corner. We fall into these traps when we become a little too smart in how we manage our money. Perhaps we think we can get a great deal with 0% financing. We have a spending plan but don’t really follow it each month (spending is under control). Or we buy in advance, borrow from our savings with the good intention of paying ourselves back. While on the surface these moves seem harmless, dig a little deeper and you’ll see how they can rob your financial peace.

0% Financing Deals

I know 0% financing seems to make sense and on the surface seems like a great deal! After all, you’re not paying any interest unless you miss a payment. A lot of people use 0% financing for TVs, appliances, and cars. We’ve certainly used 0% financing for items in the past. However, this is never as good of a deal as it seems. 0% financing is still debt no matter how you look at it. You’re locked into making payments every month until your payoff date and there are typically big penalties if you miss.

The biggest problem with this type of financing, or any financing really, is presuming you will always have the money to make the payments each month. The bigger the payment, the bigger the presumption you’re making. Surprise expenses come up from time to time for all of us and that’s just a fact of life. If money is tight, you might be forced to miss a payment or have to put that surprise expense on a credit card because of your 0% payment obligation. Forget about 0%, avoid the temptation, and simply consider whether or not you want the debt hanging over your head.

Not Following a Spending Plan

We create a budget to plan our spending each month and it would be ridiculous to pretend that we’ll always stay within our budget. As good of a planner as we may be, there are still going to be times we spend a little more than anticipated. Maybe because we bought more groceries than usual or gas prices increased. There are many reasons. But if we consistently ignore our spending plan and don’t correct overspending problems, we’ll dig ourselves into a hole that can be difficult to get out of. Too much eating out? It will eventually catch up. We’re either forced to take money from another budget category to keep our spending in balance or use a credit card to make up the difference. Otherwise, we won’t have the money to meet other expenses. Don’t beat yourself up about overspending a little, but don’t let it run out of control either. Create a plan so that you have a plan for your money and your money isn’t spending you.

Borrowing from Savings

Borrowing from savings is easy to do sometimes. Perhaps you’ve been told you’re getting a work bonus, but you won’t receive the money for a couple of months. Anyone remember Clark Griswold presuming upon the future and purchasing his swimming pool in the movie, Christmas Vacation.

It’s easy enough to spend ahead from savings and then some. But the problem is using money today you may very well need tomorrow. Again, life happens and we all need our savings from time to time, right?

Things get really complicated when you have to put new expenses on a credit card because you’re waiting for the future money to pay back your savings. Borrowing from savings gets more complicated when you borrow based on an assumption that you’ll earn the extra money later.

What happens if you don’t earn that money? Again, you’re forced to swipe a credit card to meet expenses!

Buying a House with Little Money Down

The home of your dreams is certainly enticing, especially when you’re out touring homes on a Sunday afternoon. The bottom line here is that we’ve learned that a house isn’t necessarily a safe investment. It’s subject to economic swings just like the stock market. So, not having at least 20% down for a house potentially costs you more than monthly PMI and a higher monthly mortgage payment.  Should our economy go into a recession, you risk being upside down in your investment and either having to short sell or foreclose if you need to get out of it.

Play it safe and rent until you can save for a 20% down payment. There is no shame in renting and having more flexibility, less maintenance overhead, and perhaps a more desirable location. Long term, buying a house is a great move, but step into it with financial sense and control dream house emotions.

Not Having a Least $1000 in Savings

“Make sure you have saved at least 6 months to a year in your emergency savings account!” The advice goes something like that. Honestly, I appreciate this advice from many financial gurus, but I sort of snicker when I hear it. I agree with it, don’t get me wrong. Sure, save, save, and save to cover your expenses in the event of a job loss or illness. Cover yourself for emergency situations. But truthfully, Americans have a hard time saving, especially, this much. If it’s within your means, please do so.  Work hard to put away excess cash and find ways to save money. But, focus on one goal first: save $1000. I’ve met some emergency situations over the years and honestly, most of them are fundable at $1000 or less. I’m not suggesting that’s all you should have, but you’re going to meet an emergency here or there and $1000 is the minimum you need to have stashed to keep the financial peace.

All these things are certainly easy traps to fall into. Believe me when I say my wife and I’ve experienced every one of them and they’ve definitely robbed us of our financial peace, creating some stress and worry.

What do you think about these traps and what traps have you experienced?

Source: http://ptmoney.com/traps-that-will-rob-you-of-your-financial-peace/

The State of American Credit Card Debt in 2015

I think a lot of Americans are in credit card debt since it is so easy to get credit these days.

Americans continue to dig a deeper hole when it comes to credit card debt. According to the Federal Reserve and other government statistics, our penchant for indebtedness means that the average household now owes $7,281 in credit card debt alone.

But here’s the thing – that average includes even those who carry no debt at all. So when you take out the households and families that don’t carry a balance on any of their credit cards, the average outstanding balance surges to $15,609.

What’s more, as of early 2015, the total outstanding consumer debt in the U.S. has risen to $3.34 trillion. That figure includes car loans, credit card debt, personal loans, and student loan debt — but not mortgage debt. (That would add another $8 trillion to the pile.)

American Debt Statistics

• Average household credit card debt: $15,609
• Average mortgage debt: $156,706
• Average student loan debt: $35,000

Source: government data; current as of 2015.

Further proof that credit card debt and general indebtedness are heading in the wrong direction comes from a recent study on credit card debt from CardHub. According to the study, consumers ended 2014 with a $5.71 billion net gain in credit card debt, which means we’ve now seen six consecutive quarters of increasing credit card balances as a nation.

What Does This Mean for the American Economy?

Credit card debt and household indebtedness aren’t necessarily a bad thing. New mortgages mean new homeowners, a huge driver of construction and retail activity. And the underlying consumer spending that results in credit card debt leads to economic growth and expansion. The more people spend, the faster our economy can grow – and the more jobs and wealth will ultimately be created.

And if wages are rising in a healthy economy, that’s a good thing. The problem is, prolonged indebtedness cannot necessarily be sustained; it may be a symptom of people living beyond their means or trying to keep up with rising prices even as wages stagnate. Furthermore, down cycles work to suppress credit card spending, further deflating the economy.

From 2007 to 2010, for example — which includes the prime years of the Great Recession and some of the hardest years the American economy has seen in decades — the number of Americans carrying credit card debt fell dramatically as many consumers buckled down and either cut up their cards or were forced to stop spending — or perhaps even went into default. Among households carrying debt, the median debt load dropped 16.1% from 2007 to 2010, from $3,000 to $2,600.

More Statistics on American Credit Card Debt and Indebtedness

The following statistics, courtesy of Nasdaq, break down the extent of American indebtedness even further.

Here’s what Americans owe on credit cards:

• $1,098 per card that doesn’t carry a balance
• $1,648 per account among U.S. adults with a credit report and Social Security number
• $3,600 per person among U.S. resident adults
• $5,234 per person, excluding unused cards and store cards
• $5,596 per U.S. adult with a credit card
• $5,700 per household with credit card debt
• $7,743 per card that usually carries a balance

As total balances grow higher and higher, you would probably assume that the percentage of Americans carrying credit card debt has also increased with each passing year. However, the exact opposite is happening.

As American debt loads climb higher than ever before, the percentage of Americans racking up those debts is shrinking:

Year	Percentage of Americans with Revolving Credit Card Debt
2009	44%
2010	41%
2011	40%
2012	39%
2013	37%
2014	34%

This can only mean one thing: While more and more households are choosing a debt-free lifestyle, households who feel comfortable carrying debt are taking on more of it than ever before.

While this may not pose a problem in every case, mounting debt loads may ultimately take a toll on many of those families.

Students and Credit Card Debt

The Credit CARD Act of 2009 added certain protections that made it harder for students, specifically, to get into credit card debt. The law took effect in 2010 and has two purposes according to the Consumer Financial Protection Bureau.

The first is fairness since the law was designed to “prohibit certain practices that are unfair or abusive, such as hiking up the rate on an existing balance or allowing a consumer to go over the limit and then imposing an over-limit fee.”

A second objective was transparency. With its passage, the Credit CARD Act aimed to “make the rates and fees on credit cards more transparent so consumers can understand how much they are paying for their credit card and can compare different cards.”

With the average student loan debt expected to be nearly $35,000 for 2015 graduates, this law was very well-intentioned. Meanwhile, it’s had a relatively positive impact on the overall indebtedness of college students. Consider these statistics:

Balance	Percentage of Students Carrying a Credit Card Balance in 2013
Don’t know	3%
Zero balance	32%
$1-$500	46%
$501-$1,000	8%
$1,001-$2,000	6%
$2,001-$4,000	3%
>$4,000	2%

Debt levels also fluctuated among different age groups and college grade levels in 2013:

College Grade Level	Average Balance in 2013
Freshmen	$611
Sophomores	$258
Junior	$547
Seniors	$610

Where Is American Household Debt Headed?

The Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2013 examined survey results to reveal some startling conclusions when it comes to Americans’ household indebtedness. A few interesting statistics:

• A majority (57%) of survey respondents claimed to pay their credit card balance in full each month.
• Of the remaining population who carried a balance, 82% had been charged interest on their purchases during the last 12 months.
• Among those who carried a balance, 53% were only making the minimum payment.
• Among those who carried a balance, 12% had gotten a cash advance from their credit card during the last 12 months.

With those statistics in mind, it’s fairly safe to say that household indebtedness may continue to increase until something drastic happens, such as an economic crisis on the scale of the Great Recession, which led American households to pay down debt from 2007-2010.

In the meantime, it appears many Americans are all too comfortable with their large outstanding balances.

Source:http://www.thesimpledollar.com/the-state-of-american-credit-card-debt-in-2015/

4 Things You Can Gain By Not Buying That Chanel Handbag

 Chanel Handbag

A friend hailing from overseas once commented that she was amazed to see so many genuine Chanel handbags being toted around on the MRT in Singapore. In fact, most of my female friends have at least one bag from Chanel, costing about $5,000 to $7,000 a pop.

And no, most of them aren’t the daughters of tycoons but middle-income saleswomen. Now, nobody’s judging, but am I the only one who thinks it’s weird that to so many Singaporeans, $5,000 represents a chance to buy another Chanel bag… and not the chance to go on sabbatical for a month or two? Here are 4 things you gain by NOT buying that Chanel handbag:

1. Less stress

One of my friends, whose modest handbag collection is worth at least $20,000, tries to save money by having only two vegetable dishes with her economy rice at lunch. While her salary is above the national median, she is constantly stressed out by the rising cost of living. Because seriously, who isn’t?

But that’s the whole point why you might want to not go out and spend all your money on a Chanel handbag. If my friend could trade her Chanel 3.55 for cash right this minute and put it towards her emergency fund or invest it for retirement, she might just find herself feeling a little less pessimistic about the future.

2. Early retirement

Despite the general consensus that the average Singaporean citizen is pretty much doomed to put his nose to the grindstone well beyond retirement age, it seems that many do little besides complain.

Just imagine you hadn’t spent that $5,000 on a Chanel handbag. Instead, you invested the money at a rate of 5% per annum. In 30 years’ time, thanks to the power of compounding interest, that $5,000 would have become… $21,609.71. If your handbag cost $7,000, your investments would have ballooned to $30,253.60.

Now, if you spend $2,000 a month, that means that one Chanel bag could be making you retire around 1 year later. Is a Chanel bag really worth an extra year of toil? You be the judge.

3. More free time

While Singapore has its fair share of billionaires (and children of billionaires), many average income earners have Chanel bags, too. Assuming you earn an above-average salary of $4,500, it means that a $5,000 to $7,000 Chanel handbag is worth more than one whole month’s worth of salary.

Instead of spending 1-2 months’ worth of salary, you could have taken an entire month of unpaid leave to go see the world or just rest your tired body, no doubt overworked from having to toil to fund all those Chanel bags.

People often look enviously at young people who take time off in between jobs to go travel the world or pursue their hobbies. Well, if you held off on buying that high-end designer bag, you would technically have saved enough money to survive for at least a month or two without being paid.

4. Spending money on experiences

As much as it lets you channel your inner Audrey Tautou (or so you wish), that Chanel handbag isn’t going to make your life more interesting. So the next time you complain that there’s nothing to do in Singapore, think about what you could have done with the money instead of buying another bag.

Here’s what $5,000 can get you:

• 3 years of unlimited classes at Pure Yoga, probably the poshest yoga studio in Singapore
• A high-end DSLR camera + lenses and accessories +  a full suite of photography classes
• 1-year unlimited membership at Evolve MMA gym + full set of equipment and accessories
• Flight to Australia + hotel stay of 3 nights + 10 skydives (if you’re really that into it)
• A years’ rent in a luxurious Bangkok apartment
• 10-weekend trips to Bali including flights and stays at luxurious resorts

Do you have a Chanel handbag? Why or why not?

The post 4 Things You Can Gain By Not Buying That Chanel Handbag appeared first on the MoneySmart blog.

Why Americans are Getting New Credit Cards

Credit Cards

NEW YORK (AP) -- A big change is happening inside your wallet.

U.S. banks, tired of spending billions each year to pay back fleeced consumers, are in the process of replacing tens of millions of old magnetic strip credit and debit cards with new cards that are equipped with computer chips that store account data more securely.

By autumn, millions of Americans will have made the switch from the old magnetic strip cards. That 50-year-old technology, replaced in most of the world, lingers on the back of U.S. cards and is easily copied by thieves, leaving people vulnerable to fraud. Roughly half of all credit card fraud happens in the U.S. even though the country only makes up roughly 25 percent of all credit card transactions, according to a report by Barclays put out last week.

This entire switch is a massive undertaking. Roughly half of all U.S. credit and debit cards will be replaced by the end of the year. Tens of thousands of individual merchants need to upgrade their equipment to allow for chip transactions instead of "swipe-and-sign" ones. If the stores aren't ready, they could be on the hook to cover the cost of fraud.

Here's how the new cards work and how the switch could affect you at the checkout counter:

WHAT'S DIFFERENT ABOUT THESE CARDS?

The biggest difference between your old card and your new one is the metal chip embedded on the front, which means your personal data is much safer. The chip assigns a unique code for every transaction made on your card. Even if a thief acquired that code, it couldn't be used to make another purchase.

Chip cards are also harder to duplicate, although it's not unheard of. Overall, the chip cards are more secure than magnetic cards, which are vulnerable because once thieves get a copy of your credit card information, it can be quickly copied onto counterfeit cards.

Chip cards have been common in Europe for more than a decade, and they've been standard in other
parts of the world for some time.

"The chip technology is designed to prevent copying of the card," says Ellen Richey, vice chairman of risk and public policy at Visa.

In the U.S, chip-embedded cards have seen limited use until now. Laundromats, for instance, are one place chip-reading cards are being used.

WHEN WILL I GET ONE?

At this point, the majority of magnetic-stripe credit cards have been replaced with chip cards. Banks are in the middle of issuing chip-based debit cards, with Bank of America starting late last year and Chase and Citi starting this summer. Regional and smaller banks are also rolling out these cards to their customers, most of them starting later this year.

All chip cards also come with a magnetic strip in case chip readers aren't available. However, if a merchant does accept chip cards for purchases, you should use that option every time because it's more secure.

WHO'S BEHIND THE CHANGE?

The change is mostly coming from banks and payment processing companies — Visa, MasterCard and American Express. Banks have wanted a more secure form of payment because they have generally been on the hook for any fraud that happens on their cards. Originally the banks were relying on their own software and data from the payment networks to catch fraud at the point of sale in the U.S., but it became clear something more was needed, Richey said. Banks, particularly small banks, would often pay out of pocket to cover any fraud that happened on their customers' payment cards. The American Bankers Association estimated that bank account fraud cost the industry $1.74 billion in 2012, the most year the data is available.

The payment networks have set a soft deadline of October 1, 2015, for the switchover to be made. After that date, most merchants who continue to accept magnetic strip cards and have not upgraded their equipment could have to pay for any credit or debit card fraud that happens in their stores. The "liability shift," as it's called, presents a looming deadline for the banks, payment companies and merchants.

HOW DO I USE THE CHIP CARD?

Instead of swiping your card at the checkout, you'll insert it into a machine with a slot like those on ATMs. Your card will stay in the slot until the machine tells you to remove it. Unlike magnetic stripe cards, chip cards need to be left in the machine for a few seconds to work.

WHERE AND WHEN CAN I USE MY NEW CHIP CARD?

You can use it now. The problem is that merchants need the right equipment to accept the cards embedded with chips. Many stores have been slow to upgrade their equipment, despite the October deadline, because it could be a significant expense to replace equipment and retrain employees. Payment processing companies like Visa, and the bank who issued the cards, are pushing stores to accept the chips cards. Visa expects roughly half of all merchants to have chip card readers by the end of the year.

ANYTHING ELSE CHANGING?

The new cards won't work quite the same way they do in Europe, but they're a step closer. The type of card being rolled out in the U.S. will still need a signature when you pay for something. Eventually what will be used in the U.S. is what's used in the rest of the world, known as "chip and PIN." It would work similarly to your ATM card now. You would insert your card and enter a four-digit password to approve the transaction. Security experts believe this is a very safe way to pay for things. Signing for a credit card purchase provides near-zero security since signatures vary and are rarely checked.

WHAT COULD GO WRONG IN OCTOBER?

From a consumer perspective, there is little to worry about. The biggest issue is for the merchants, who are way behind replacing their equipment in time for the deadline.

10 Easy Ways to Simplify Your Life

   I'm grateful for the simple joys of life

We live in a world where modern lifestyles pull us in all directions. It’s no wonder we are overwhelmed and stressed out by our busy lives and cluttered homes.

UCLA researchers even wrote a book on the subject, “Life at Home in the Twenty-First Century: 32 Families Open Their Doors,” and found many families had garages too full to accommodate cars, backyards that are never used, and mothers with elevated stress hormones.

If you’re ready to step off the hamster wheel, here are some basic strategies to simplify your life.

1. Consolidate accounts

It’s hard to say no to the $100 bonus for opening a checking account when the new bank comes to town. Or maybe you can’t refuse the great sign-up offer available from the latest rewards credit card.

Before you know it, you could have a half-dozen accounts at various institutions. Your IRA is in one place, the checking account is in another. You also have a mortgage, emergency savings and insurance products to juggle.

Rather than having accounts scattered to the wind, try to consolidate them in a couple of places. Pick one bank for money and credit and one company for all insurance needs. In the end, you not only have fewer accounts to manage but also may get better rates or terms for bringing more of your business to a particular institution.

2. Purge the paperwork

Consolidating accounts is only the first step. Next, purge the paperwork.

Sign up for paperless statements, which most financial institutions offer. With the exception of a few vital documents such as birth certificates and titles, scan and shred almost everything else in your filing cabinet.

For more pointers, check out this article with five tips for paperless finances.

3. Pay cash whenever possible

Don’t underestimate the power of cash to simplify your finances.

Paying with cash can prevent you from overspending, and it eliminates much of the stress of daily money management. Never again will you have to worry about whether your card will be declined because the fuzzy math in your head isn’t quite right.

4. Automate your life

Free yourself from the anxiety of paying the mortgage on time by automating your finances.

If you’re not being paid via direct deposit, sign up. Some employers will let you split your paycheck among two or more accounts. If that’s possible, send at least 10 percent of earnings to your savings account.

Use a bill-pay service. Depending on your bank and billers, you may be able to request bills be electronically delivered, and the amount due paid automatically. Otherwise, you can set up recurring monthly payments.

For expense tracking, skip the spreadsheets and use an app or tracking software, such as our partner PowerWallet.

5. Stop buying more stuff

Minimalism is one of the core principles of simple living.

The less stuff you have, the less time you’ll spend maintaining, rearranging, and obsessing over what you’ve got. Plus, when you stop spending, you have more money for saving, or for splurging on important things.

6. Declutter what you have

As the UCLA researchers discovered, clutter can stress us. So focus on getting rid of the excess stuff you already own.

Before investing in yet another organizational system or storage unit, consider boxing items and shipping them to the thrift store or the landfill. Or, sell what you don’t need. After all, simplifying can be good for your wallet as well as your state of mind.

7. Cut loose toxic and high-needs people

When simplifying, don’t forget to look at the people around you.

Toxic personalities make lives difficult. They steal our good days and put demands on time and attention that could probably be put to better use elsewhere.

Consider how many times you’ve gotten off a phone call with a high-needs friend only to discover you’ve lost your mojo to get anything done for the rest of the day.

Do yourself a favor and cut off the emotional vampires feeding on your positive energy.

8. Reconsider your commitments

Juggling multiple activities is much more complex than focusing on one. Simplify your schedule by reconsidering everything on your calendar.

Ask yourself:

• Do I need to do this?
• Do I want to do this?
• Can I delegate this to someone else?
• What happens if this doesn’t get done?

We wear our busyness like a badge of honor, so saying no won’t come naturally at first. However, an uncluttered calendar is the key to a simple life.

9. Unplug at least once a week

At least once a week, put away all the electronics. Power down the computer put away the phone and turn off the TV. Spend time getting reacquainted with paper books, an old hobby, or your backyard.

Unplugging helps you slow down. Electronics tend to be “in your face” — loud, bright, and engaging. When they constantly surrounded you, it’s easy to lose track of time and start operating on autopilot.

Give yourself some quiet time to contemplate something more meaningful.

10. Create routines

Finally, a simple life thrives on routine. Without it, you may waste time and energy wondering what to do next.

Don’t confuse a routine with a schedule. A routine isn’t set in stone with time constraints. Rather, it’s a general idea of how your day will go.

A routine means knowing that you get up in the morning, have breakfast, load the dishwasher, and go for a walk. It could also be paying the bills on Monday, shopping on Tuesday, and doing your weekly dinner prep on Saturday.

Routines take the guesswork out of regular activities and make life simpler.

Source:http://www.moneytalksnews.com/10-simple-strategies-simplify-your-life/?all=1