16 Ways to Simplify Your Finances During a Time of Economic Turmoil

With all of the turmoil and upheaval taking place around the country and the world right now, streamlining and simplifying our daily lives has become more valuable than ever. That includes streamlining your financial picture in order to free yourself up to focus time and attention where it’s needed most. From putting bills on autopay to reducing monthly expenses, here are some of the ways personal finance experts recommend tidying up your financial act.

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Perhaps one of the first and most important steps to take when it comes to simplifying your financial picture is to conduct a thorough review of your expenses and income, says Adem Selita, CEO at The Debt Relief Company. “Doing so will allow you to cut out expenses and better adapt to your situation,” says Selita. “This can be a little time consuming. But do it once, and you won’t have to worry about tracking your budget again. The simplest way to do this is on an Excel sheet.”

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Take the expense evaluation effort one step further: After you’ve identified areas of spending that are not essential, eliminate them, says consumer analyst Julie Ramhold of DealNews. “Right now, isn't the time to splurge. It's not a good time to go on a shopping spree if you're concerned about finances,” says Ramhold. “Instead, cut out anything that isn't absolutely essential. Try to find free alternatives for the fun things you enjoy. Now's a good time to stick to staying in for date nights, returning to hobbies you already have the supplies for, or even just catching up that stack of books you've been meaning to read.”

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Now is also a good time to be taking advantage of any deferment or leniency offers your creditors are currently providing, says Selita. “Banks are much more open to renegotiating your credit card debt right now, whether it be renegotiating APRs or the balances owed on your debts,” says Selita.

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Another key step to achieving a simpler financial life is consolidating your various accounts, whether they be savings accounts or credit cards, says Andrew Roderick, CEO of Credit Repair Companies. “Having one savings account makes it easier to keep track of how much you really have rather than having to check on several different accounts,” says Roderick. “This is also true for credit cards. A lot of people open different cards for perks such as zero interest. These perks are not always applicable forever though, so switching to just one card after there are no more rewards to redeem is much simpler.”

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Let’s face it, paying bills can sometimes fall through the cracks when we’re busy or downright overwhelmed by juggling a million tasks amid the new normal brought about by COVID-19. Give yourself a helping hand by establishing automatic payments for as many bills as possible, says Lisa Torelli-Sauer, editor at Sensible Digs. “You can use automatic payments for bills that are the same amount each month, as well as bills that have varying payment amounts,” explains Torelli-Sauer. “Most credit card companies have a payment option that automatically drafts your checking account for the minimum payment due. You can still make an additional payment each month if you’d like, but you’ll have peace of mind knowing that your payment will never be late.”

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Ultimately simplifying finances is about creating a greater sense of control and understanding over your financial life — which can lead to better financial decision making, says Jacob Sadler, a certified financial planner for Woodstone Financial. “The 30,000-foot view of your financial life is your balance sheet. Every account, every asset, every liability — all in one place. Do this every year to keep your finger on the pulse of your personal financial life,” says Sadler.

If your employer allows it, consider establishing direct deposits for both your checking and savings accounts, says Kimberly Hamilton, a certified financial education instructor and founder of Beworth Finance. “This will help ensure you meet your savings or investing goals first,” says Hamilton.

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Many credit card companies, lenders and even utility providers will change the due date of your bills at your request. Hamilton suggests making sure bill payments align with your payday to help simplify life. “Not only does this better position you to pay your bills, but it also allows you to pay them all around the same time, saving you the hassle of having to revisit your bills multiple times later in the month,” explains Hamilton.

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Banking and credit card alerts can be a lifesaver and a money-saver when life is unusually busy, says Rebecca Lake, creator of Boss Single Mama. “If you're stressed about money, it's easy to forget to pay something which means you could get hit with a late fee, not to mention your credit score might take a hit,” says Lake. “If your bank or credit card company lets you, set up alerts to track due dates. Using those to stay on top of your bills can make life easier.”

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Having debt becomes even more of a financial burden if your income drops because of a layoff or reduced hours at work. Lake suggests looking at all of your debt categories and identifying ways to reduce your payments. This might include shifting credit card balances to a zero interest credit card or even simplifying student loan debt, she says. “For student loans, you might consolidate or refinance, depending on whether you have federal or private loans,” continues Lake. “And with interest rates as low as they are now, it could also be a great time to consider a mortgage refinance.”

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In today’s world, we have so many options for paying for things — credit cards, cash, debit cards, Venmo, PayPal, you name it, says Kari Lorz of Money for the Mamas. “Who knows how much you've spent across all these channels?” says Lorz. “Pick what works best for you and stick with that. My advice is to have two credit cards, use one for all your purchases. And I mean everything, so you can go back and look at all your spending in one place. You have a second credit card just in case you need to cancel the first one, so a backup.”

Freezing your credit with the credit bureaus such as Equifax, Transunion and Experian restricts access to your credit report and can prevent identity thieves from opening a fraudulent account in your name. Lorz suggests taking this step to further ease any financial stress during the pandemic. “That way, you know that nothing shady is going on in case there's a data breach. And there will always be data breaches,” says Lorz. “The peace of mind that this provides is priceless, and you’ll never have to clean up the aftermath of a stolen identity.” Keep in mind, however, that freezing your credit prevents prospective creditors from accessing your credit file, which means they won’t be likely to offer you credit if they cannot see your credit report. In other words, a credit freeze also prevents you from opening new accounts, which could be good or bad, depending on your circumstances.

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With the economy on such shaky ground, Aleksandra Arsic, co-founder of Capital Counselor suggests focusing your financial resources on reducing your largest debt as soon as possible to prevent any disasters down the road. “If you have several debts, now is the time to strategize to ensure you’re taking the safest way in case of recession,” says Arsic. “Make sure to increase your payments on your most substantial debt, or the one with the highest interest rates, just in case all of this economic turmoil hits you personally. It’s good not to have a quickly growing debt.”

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Designate a specific day each month or every few weeks to pay any bills that you can’t use autopay for, and to review all of your accounts, says Wade Schlosser, CEO and founder Solvable. “Look for unusual charges, review subscriptions you may not want to keep anymore, and ensure any direct deposits you were expecting came in,” says Schlosser.

As has been stated in multiple ways already, it’s a good idea to regularly review your accounts, an effort that helps ensure you haven’t been compromised by fraud. But when life is hectic, this task can fall through the cracks. Schlosser suggests streamlining this task by setting up automatic spending alerts for all your accounts. “If you set up spending alerts to be sent to your phone or email each time activity occurs on your account, you’ll find out about unauthorized charges immediately,” Schlosser explains. “I recommend automating spending alerts and then reviewing all accounts monthly just to make sure nothing slipped through.”

There are countless websites and apps available these days to help simplify your overall financial picture, says Scott Trent, CEO and president of the real estate and investment website BiggerPockets. If you simply do not have the time to manage money matters on your own, pick an app that proactively does the work for you. “I use Mint to help track all of my finances,” says Trent. “With this service … everything is automatically processed. Then at the end of each month, I can review my spending to analyze my spending habits for that month. The entire process to set up your account takes less than 10 minutes.”

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