"I refuse to spend the first 60 years of my life worrying about the last 20." via Possum Living
We've been following the program laid out in Your Money or Your Life for the last few years. The program helped us get out of debt and seriously question how we spend money (our life energy). We've been talking about streamlining our finances for the last few weeks and reading The Simple Guide to a Minimalist Life prompted us to take action in 2 areas: expense tracking and the use of credit cards.
1. Tracking expenses.
Right now we track all of our purchases through a program called Money Dance. Tracking expenses is a good exercise because it really forces you to take a hard look at what you're spending your money on. The number of receipts I've been entering is crazy! I think it's a sign that we're spending too much money.
2. Cash only, no credit.
We use our credit card sparingly and pay them off every month, but I'd rather use cash. Cash is easier to manage (at least for me). Also, once the cash is gone we won't be tempted to overspend. Overspending is so easy to do when using a credit or debit card.
For example, I'm thinking of using an envelope system. The envelopes would be separated by spending category, for things like groceries, dining, laundry, etc. We won't have a lot of money lying around the house because a majority of our bills are set up through automatic withdrawal. I'm able to set aside money every month for our fixed bills, like rent, power and the internet. Automatic withdrawal has made my life a lot easier and has cut down on the amount of paper that enters the house.
Money management isn't rocket science. But it's important to reflect on the type of tools that are useful. Using a good expense tracking system, doing automatic bill pay and using cash are a few ways that keep my financial life sane.