Complicated ≠ better
Hello fellow investor 👋
Kate here, co-host of The Australian Finance Podcast and the person ready to help you invest your money and time, better! This article was originally shared in the Rask Education student newsletter. Simply sign up to a course on Rask Education (like our ETF investing course) to get this directly into your inbox each fortnight.
One of the things that has become more apparent to me over the past few years is that for most of us, complicated doesn’t equal better when it comes to finances.
So in today’s newsletter, I want to explore five different ways you can work towards simplifying your financial life, leaving more time for the fun stuff!
Why is it a good idea to simplify your finances?
- You’ll reduce financial stress
- You’ll have a clearer picture of your finances and be able to set meaningful goals
- You’ll avoid letting problems snowball and get out of control
- You’ll be able to minimise your financial regrets down the track
Tune in to our recent episode of The Australian Finance Podcast, in which Owen and I discuss actionable ways to simplify your finances.
📅 Schedule regular check-ins
Don’t leave your financial future to chance! Just like your home needs regular maintenance, so it doesn’t turn into a costly mess, so do your finances.
By being proactive with reviewing your spending, investing and budget each month, you’ll be in a much better position.
⚠️ Stop what you’re doing now and add a recurring calendar invite to your calendar right now. Go on, I’ll wait…
🥅 Reduce the number goals you set
Don’t get me wrong, I absolutely love setting goals, especially financial goals, as listeners of The Australian Finance Podcast would know. But, sometimes when we set too many we get pulled in 101 different directions and don’t make meaningful progress towards any of them.
So what would I suggest? Instead of having a laundry list of different money goals, focus on only what’s most important to you.
I suggest narrowing down your list to prioritise just three: one short-term, one medium-term and one long-term goal. Then come up with a clear strategy to work towards each one.
👩🏽💻 Close down unused accounts
Do you have any unused bank accounts, credit cards, transaction accounts, investment accounts… you name it… running around?
It’s time to clean-up your digital finances, and make things a lot easier for yourself, by closing down any unnecessary accounts.
📝 Reduce your admin
Things can quickly snowball out of control, especially if you push the mail under the bed, ignore the emails asking for your tax file number, or leave all your receipts for tax time in various piles around the place.
Find a system that works for you, so you can keep on top of your portfolio, store all the details for your tax return in one spot.
4 ways to simplify your financial admin:
- Update your share registry info for the investments you hold on a regular basis (check your TFN has been provided and the bank account details are correct for incoming dividends)
- Elect to receive everything to do with your finances via email
- Set up a folder in your inbox and auto-forward key emails to it that are related to your finances and taxes (tax receipts, investment confirmations, etc.)
- Make sure all your contact details are up-to-date for all your accounts — there’s billions of dollars of unclaimed money in Australia, some of it might be yours!
⚙️ Automate your investments
Finally, it’s time to automate your investments. This keeps your financial life simple, and takes a huge amount of decision-making fatigue away from you every month.
You can put your portfolio on autopilot by setting up an automated investment plan using a broker like Pearler, a micro-investing app like Raiz or by using a robo-adviser like SixPark or InvestSMART.
Even the best investors know they won’t always have the willpower to invest when the headlines are scary and their portfolios are flashing red.
But by automating your investment plan, you’re effectively saying that whatever the market is doing, you will be investing (without having to overcome the mental barriers of making the decision to buy when you’re feeling uncertain and the headlines are at their worst).
Keep your investments simple, diversified, low-cost and regular. Automation helps — a lot.
Remember, investing is a marathon and not a sprint.
✨ Have any extra tips? Let us know!
Do you have any other tips on making your financial life easier? Please let me and the Rask Core 🌏 community know about it by jumping into the Community forum.
I’ll share your suggestions in our upcoming Money & Chill episode on The Australian Finance Podcast — stay tuned!
Cheers to our financial futures,
