1. Understand your financial situation: The first step to decluttering your financial life is understanding what you’re working with. Gather all the information about your financial accounts, including checking, savings, credit cards, retirement accounts, and more. Take stock of any outstanding debts or loans, and tally your monthly expenses to understand your budget. Wrangling this information can take a little effort, but it’s a necessary step to understand what you have and how you’ve managed it so far.

2. Simplify your budget: Once you have an accurate picture of what you make, spend, and save, you can take control of your money. Categorize your budget to four main areas: necessities (including housing, food, and utilities), savings, debt payments, and discretionary spending. Figure out the areas where you’d like to allocate more or less money, and develop actionable steps to achieve these goals. If you’re having trouble working out a budgeting plan or realistic goals on your own, get in contact with a Certified Wellbeing Coach¹ at Affinity.

Once you have an outline, find a consolidated place to track your expenses month over month. Consider a budgeting app or a spreadsheet to keep things organized. Try building in rewards when you achieve a goal, like paying off a debt or saving a certain amount. Financial responsibility is important, but celebrating your efforts will also keep you motivated.

3. Streamline your banking: Managing multiple accounts or credit cards can add unnecessary complexity to your financial life. Consider consolidating your accounts to make tracking and managing your money easier. If you have any credit cards you no longer use, reduce them down to the essentials.

You should also take advantage of digital tools. If possible, automate recurring bills, such as your mortgage, utilities, and credit card payments. Setting up automatic transfers to a savings account can also help you meet your goals without much effort. With Affinity, you can track your accounts and manage banking online. By streamlining these processes, you’ll reduce the mental load of managing your accounts and make it simpler to reach your goals.

4. Organize debt repayment: Debt can be one of the most stressful aspects of personal finance. A strong repayment plan can guarantee that you meet your milestones without fear. The avalanche method, which focuses on paying off high-interest debts first, can save you money in the long run. Alternatively, the snowball method, which involves paying off the smallest debts first, can provide quick wins and motivation to keep going. Whichever method you choose, automate your payments whenever possible to avoid late fees. By simplifying and automating your debt repayment plan, you’ll be well on your way to financial freedom.

Decluttering your financial life doesn’t have to be complicated. By taking stock of your accounts, streamlining your banking, simplifying your budget, and tackling debt, you can save time and gain confidence. These small, intentional changes will help you regain control and focus on what truly matters in your life. Start today, and you’ll be well on your way to a simpler, more organized financial future.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.

¹ Retrieved from: https://www.affinityfcu.com/financial-wellbeing/certified-wellbeing-coaches