As I work on the never-ending task of aligning my life with who and what I want to be, I’ve realized that a big part of this is minimizing the time I spend on unfulfilling activities. For example, I play a lot less tennis than I used to, and instead, spend more time reading.
But, more than that, I find I am managing my time in shorter segments as well. Rather than spending an all-day couch-fest, for example, in front of the TV, I’ll plop down for 20 minutes of relaxation. And surprisingly, I find those 20 minutes a lot more enjoyable than my previous all-day sessions!
I can’t pinpoint exactly what is causing this change, but it might have something to do with the fact that I’m squeezing much more value out of each day.
As I think about people in my community and reflect on my experience working with many of you, I see a lot of effort being put into personal finance without much value coming out.
To help you minimize the time you spend on your finances and maximize the value, I’ve put together a non-exhaustive list of ways that just might help you get started.
1. Get Value for Every Dime You Spend
We live in an expensive place, and it’s quite easy to feel like money is falling out of our pockets as we walk down the street. This comes from not assessing the real value of each purchase and might arise from the fact that many of us don’t honestly know how we are spending our money in the first place.
Instead, find ways to consider each purchase you make and whether it improves your life in excess of the actual dollar amount. This is a lifelong endeavor as our wants, needs, and even opportunities change over time. Complacency will drive you to spend money on things you do not value.
That being said, it’s plain to see how this saves money, but how exactly does it save time?
Well, if you cut the number of transactions you have each day, you’re not only saving time checking-out, but you’re saving yourself time reviewing and paying your bills as well.
*Cautionary note: You may be thinking, “Gee, instead of cutting expenses, why not just focus on making more money?”
That friends, can actually make things worse if you aren’t watching the value you get for your spending. This is because, no matter how you make that extra money, it doesn’t last forever. Your expenses, however, do.
2. Keep More in Your Bank Accounts
Specifically, keep higher balances in your checking and savings accounts.
If you do this, you’ll spend less time shifting balances around and have more confidence when large expenses that you do value come up.
In addition, having more in savings means you will be better prepared should disaster strike. It also means you will be ready should opportunities arise.
I realize I am speaking in general terms here – the words “more” and “less” mean different things to different people. But, if you find that managing your accounts takes up too much of your time, this can be an elegant solution for you.
Of course, you won’t earn much interest on these balances, but that’s not really their objective. Their objective is to fund the “operations” of your life and be there when you need them.
3. Use One Credit Card
First, there is no decision to be made at checkout. You simply pull out the card and swipe away!
At the end of the month, you get a single statement showing all of your expenses. Without hiring a planner to do it for you, there is no easier way to see your month’s expenses all in one place.
And, please, don’t worry about getting bonus “points” or “miles.” If you’re not actively hacking these offers, the benefits you receive will not be significant enough to offset the hassle of managing more than one card.
My recommendation: pick a card with good rewards (or cashback) and stick with it until something better comes along – and then switch all of your spending to that new card.
Another tip: use as little cash as possible. Not only does it take more time to pay in cash, but you can’t track where your cash went, and it’s far too easy to pull cash out to pay for things. Use the moment of producing your credit card to continue to weigh the value of what you are buying.
4. Simplify Your Investments
It’s important to have a well-diversified strategy you can stick to in good times and bad, but don’t make it complicated!
Think about the markets from a top-down perspective. Start with stocks and bonds. Then, within stocks, break down your portfolio in sectors such as U.S. Large Cap, U.S. Small Cap, International, and Emerging Markets.
Go no further than this when putting together your portfolio. Don’t waste time picking individual stocks, because really, no one knows where individual stocks will actually go over time.
Instead, focus on those broad sectors and put together an allocation that, when the next crash comes, you can ride out. This will be the best long-term allocation for you and will provide what the market gives to support your lifelong spending.
When it does come time to trade your portfolio – like when you make a contribution or withdrawal – make sure every trade moves you toward your long-term allocation target. If you are taking money out and are over-weight US Large Cap, sell some of those to get it back in line or at least in that direction.
Don’t make more work for yourself by selling something on a whim and then needing to make additional trades to move back toward your targets later.
5. Quit Watching Your Investments
Along with simplifying your investments, stop paying so much attention to them.
They will do what they are going to do and if you’ve structured a solid strategy, there’s likely no need to make changes.
A good tactic to help with this, and add peace to your life, is to stop paying so much attention to the financial press. Television stations like CNBC and online market commentators have incentives that are not aligned with yours.
Their job is to get eyeballs, and the only way to do that is to be sensational. And most of the time, the markets are pretty dull, marching up and up over long periods of time. So, how do they sensationalize it?
They make a big deal out of small things. Don’t get caught up in this.
Don’t believe me? Just consider how all of these people make their living – look at who’s advertising, and you’ll find it’s the big Wall Street firms. All of them have a business model that creates revenue when you do something – not when you do something that is right for you, which often is to do nothing at all!
6. Get the Big Stuff Done and Forget About It
Here, I’m talking about life insurance, estate planning, and maybe disability insurance.
If you are in need of these (and we all are at various points in our lives), then get it in place in its simplest form and forget it.
If you have kids, you probably need life insurance. Get a term policy that gets them to an age where you think they will be self-sufficient and move on with your day.
Put together an estate plan that accomplishes the things you want when you become ill or pass. Adjust this plan as your kids grow – perhaps one or two changes until they are adults – and then, again, move on with your day.
Don’t worry about it. Don’t panic. Just get it done and live your life!
What Gets in the Way?
It’s easy for me to sit here and say you should do all of these things, right? When in reality, it might be easily said, not so easily done, and I get that.
Many of the items above involve changing daily habits that you have developed over the years. Don’t think you can change everything at once. Just pick one area for improvement to start and see if you aren’t getting a piece or portion of your day back.
Another way this could work against you is if you end up getting in over your head, technically speaking. If you sense that start to happen, consider whether you really need to go that deep into the topic, or whether a more straightforward solution might be better given the effort it takes to proceed.
Most likely, you can do with a simpler solution, but if not, check with a professional who is not incentivized to make your life more complex.
Here’s the Good News
This is all simple but difficult.
Realizing and accepting this will change the way you look at your finances. Wall Street wants you to believe your financial situation is complex so they can sell you complex solutions. Don’t buy it.
Lessening the complexity in your financial life can significantly improve your overall life without harming and, in many cases, actually helping your finances along the way!
Do you need help streamlining your finances? Click here to schedule your FREE 30-minute discovery call and let’s talk about how you can get a simpler solution with more value.
Deliberate Money Moves Ep. 08: How to Gain Time and Value in Your Finances
When it comes to assessing and changing your financial life, what’s holding you back? Is it finally weeding things out and making the change? Is it the inertia or that you find yourself falling back into old habits? No matter what it is, if you genuinely want to spend less time and find more value, you need to break the habits, commit to the change, and weed things out. That’s what we’re going to talk about in this new episode of Deliberate Money Moves, so find a quiet spot, listen in, and get ready for more time and more value, because you deserve it!
Highlights from Episode #08:
- Yes, this sounds simple, but when it comes to implementing these changes, you will have to commit to just that.
- Make your finances as simple as you can, and you’ll be good to go.
Time-stamped Show Notes:
0:54 – How do you get value for every dime you spend?
2:40 – Why should I keep more in “cash?”
3:30 – This is the importance of using one credit card vs. many
4:47 – Why you should simplify your investment portfolio
6:21 – Here’s why you need to stop watching your investments
7:17 – Get this “stuff” done and live your life!
7:56 – What could work against us when trying to make these changes?