Take the Stress Out of Your Daily Finances

Jon and Emily wed five years ago and brought into their marriage multiple bank accounts, several credit cards, college debt and loans on homes and autos. Jon is paid a salary with occasional bonuses. Emily has her own business and its income can be erratic. However, she takes a systematic monthly withdrawal to cover basic living expenses. Their bills are mailed to the house, and each month they struggle to figure out which accounts and what money to use to pay them in a timely manner.

Managing their daily finances is driving them crazy, and they spend many unnecessary hours on this task. When they travel, bills can pile up and be misplaced, causing late payments. They decided to ask some married friends, who seem to have their finances under control, for suggestions on basic money management and simplifying their finances. Their friends recommended that Jon and Emily follow some simple, prudent steps.

The first step was to close all their personal bank accounts except two: one checking and one savings. They set up automatic deposits for Jon’s salary and Emily’s monthly income withdrawal into the checking account. Previously, they had received checks, which required trips to the ATM or bank to deposit. Sometimes the mail was delayed, or lost, and once a check was stolen out of their mailbox.

Next, they set up all ongoing monthly expenses, such as utilities, loan payments and credit card payments, to be automatically paid from their checking account. They established online bill pay, again from their checking account, to pay any other expenses, such as semi-annual insurance bills. This eliminated check-writing almost entirely.

They also made sure they had enough cash in savings for six months of living expenses and could transfer funds easily between their checking and savings accounts. Jon agreed to check the balance in the checking account on a weekly basis to ensure funds were available when needed.

In addition, they set up electronic delivery for all their bill-related mail to prevent paper from piling up, especially when traveling. All deliveries are sent to an email account they both check on a regular basis, and they signed up for bill-due notices from all vendors.

The next big step for Jon and Emily was to decide on one credit card suitable for both of them. The many other credit cards they carried got cut up and the accounts closed. This helped them more easily monitor their monthly charges, which in turn helped ensure they had enough cash to pay the credit card balance each month and avoid interest charges. Eliminating their multiple cards also helped reduce the risk of their credit card data being stolen.

Finally, Jon and Emily set aside a few weekends to locate and organize all their important documents. They purchased a file cabinet and shredder and created folders for their insurance policies, property deeds, vehicle titles, tax returns and loan documents. All outdated documents, such as papers on prior homes and past insurance policies, were shredded to avoid confusion on what was current.

The time and energy spent on getting organized, setting up auto deposit, auto bill pay, electronic delivery and closing bank and credit card accounts will actually save them many hours on financial maintenance going forward.

To celebrate their accomplishment, Jon and Emily had a nice dinner out with the friends whose solid money management ideas helped free them from financial stress.

This commentary originally appeared July 7 on TheCasperStarTribune.com

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Connie Brezik, CPA/PFS, CFP®

As a wealth advisor at Buckingham Strategic Wealth, Connie works with clients to form a comprehensive financial plan tailored to their individual circumstances, one that includes portfolio management, tax strategies, wealth transfer considerations, retirement analysis and education planning. She welcomes the chance to help clients work through difficult situations, finding solutions that they may not have thought of and guidance about what to do if their plans don't work out as anticipated.

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