9 secrets to help keep personal finances simple when life is complicated
SIMPLE PERSONAL FINANCE HACKS FOR BUSINESS OWNERS
“I’m too busy.” “I don’t have time.” “I’ve got too much going on.” “I can’t get to it all.” How often have you spoken these words or heard these sentiments from friends? I’m guessing pretty often.
Are we doomed to forever see our lives as overwhelming and out of control? No.
There are ways to streamline and simplify some things.
In this blog, I will share how I have simplified my personal financial life, and next week I’ll do the same on the topic of my business.
Let’s get started with personal finance advice from the perspective of a financial advisor!
During my married life, my wife Mary took on the responsibility of all things financial.
She paid the bills, reconciled the bank accounts, applied for all health insurance reimbursements, prepared financial statements for our businesses, took care of our rental properties, and monitored all house maintenance contracts (landscaping, snowplowing, window washing, lawn care, etc.).
And she did all this while taking care of the kids, of me, and of her part-time bookkeeping job.
As I have said before, I had the easy job in our marriage.
When I became a widower, I knew I couldn’t maintain my business life and handle all Mary’s responsibilities as well. I had to find a different way to get things done.
I had to find a way that I could continue to run my business, become a mom and dad for the kids, and get all the house chores done.
Long time readers of this blog will know that I tend to overestimate my time availability and assume too much work. Sure enough, early on, I tried to do everything I would regularly do plus do everything Mary would normally do. As you might expect, it was a disaster. I was miserable, overworked, and kept repeating those sentences above. I knew that my life had to change.
Two of my mentors—Dan Sullivan and Benjamin Hardy—co-wrote a book called Who Not How: The Formula to Achieve Bigger Goals Through Accelerating Teamwork, which changed my mindset and improved my life.
The authors argue that when we get a new idea, project or chore, instead of asking ourselves, “HOW am I going to get this done?” we ask “WHO should do this?”.
To understand my thinking here, you should know that Dan Sullivan believes that business owners (and others) should spend their time in activities for which they have a passion and special talent.
He calls that our unique ability.
So if my unique ability is writing blogs on financial planning, then I should spend as much time as possible on it and delegate other activities to people with other unique abilities.
If I dislike administration or house chores, then I should find a “who” with unique abilities to complete those functions.
The goal is to hire people to take on the tasks that leave you overwhelmed, thus allowing more time to concentrate on your unique abilities where the most value for society is created.
Let me share how I have incorporated this philosophy into my personal life.
1. One bank account at one bank.
How many bank accounts and banks do you deal with? How often do you transfer money from one bank or bank account to another?
Obviously, dealing with multiple banks and bank accounts complicates life, wastes time, and may lead to human errors. Personally, I had several accounts at CIBC, TD and Scotiabank. My salary was deposited into a Scotia account but the bills were paid from a CIBC account and my business expenses were paid from TD and Scotia. This mess required multiple transfers between accounts, and we often incurred interest charges from money being in the wrong place at the wrong time.
This problem was easy to fix. I closed all bank accounts except those at Scotiabank. And at Scotiabank, I only have a chequing account and no others, not even a savings account.
Life is a lot easier today, with only excess cash transferred monthly out of this account to my Scotia Wealth Management account (my brokerage account).
2. One credit card.
As with bank accounts, I had several Visas and Mastercards, some of which I never used but kept just in case. Did I really need all of these credit cards?
The multiple credit cards made my wallet bulky, and each card had a different payment date which was impossible to keep straight.
Again, I cancelled all credit cards except the Scotiabank Visa, and I no longer confuse or miss payment dates.
3. Online banking is a lifesaver.
Having your bank accounts and your brokerage accounts connected and available online is a major time saver.
Today, I can go into my Scotiabank online account and see all my cash balances, investment accounts, mortgages (on my rental properties), Visa balance, credit score and many other useful tools.
And of course, I complete all my bill payments from just one link.
4. Automate your bills.
Most people have the same bills each month, and writing cheques and using the mail system is time consuming and prone to error.
I have the following recurring bills: property taxes, water and waste, hydro, natural gas (delivered by Enbridge, a long-time holding in our dividend model), telephone and cable, car lease, and life insurance.
I established auto payments for each of these through a pre-authorized chequing plan.
For my nonrecurring expenses, such as groceries, LCBO, hair cuts, clothing, gas, travel, and so on, I use my one and only Visa with one electronic payment.
For any bills that cannot be paid by Visa, I use an e-transfer.
Simple. Easy. Streamlined.
5. Automate tracking.
I hate budgeting and tracking expenses, but I’m a financial planner and know how important these are to my goal of becoming financially independent.
I was not interested in building an Excel spreadsheet and manually tracking every penny.
Fortunately, our team member Ashley Land, mentioned an app called Mint (owned by Intuit) that can be connected to your bank and download all expenses and income into a simple to read income statement.
It’s a life and time saver.
Every week, I click a button and all my transactions (incoming and outgoing) are automatically downloaded and organized into a personal statement and compared to a budget that I established at the beginning of the year.
There is some start-up time, setting your budget and ensuring all expenses are allocated to the appropriate accounts. But now, my weekly review takes about 30 minutes and includes paying any non-recurring bills.
The program syncs in real time, and I know exactly how my money is spent—and can easily decrease spending if needed.
6. Simplify groceries and meals.
Food preparation is one of the most time-consuming aspects of life.
Preparing a shopping list, driving to the grocery store, shopping, unloading, deciding what to cook, and finally cooking the meal. It can all take a few hours per day, and for some people, all the planning required is stressful.
My solution is to order meal kits. I love meal kits.
Each week, I review 20-30 meal choices and buy five kits for my daughter and I, which are delivered Sunday afternoons. Each kit has all the ingredients needed for one meal and, with some practice, each meal takes about 30-40 minutes to prepare.
Any other groceries that I need (vegetables, fruits, cereals, toiletries) are ordered online and delivered directly to my house.
This solution will save you six to eight hours per week.
What would you do with an extra six to eight hours per week? That’s a full extra work day!
7. Hire a property manager.
I own a few investment properties which constantly require something to be done or fixed.
My time-saving solution was to hire a property manager to handle all the day-to-day issues and only call me to authorize purchases like a new light fixture or appliance.
This has made my income properties even more valuable to me.
8. Personal chores.
I like a clean house, especially a sparkling kitchen and washrooms. But when I tried to do the cleaning myself, the house become cluttered, dusty and dirty.
My solution was to hire a professional cleaning company that provided bonded employees and accepted Visa payments.
The company arrives once every two weeks and cleans the entire house. I still have to declutter and do the laundry, but that’s a fraction of the overall household work and time.
For the grass and snow, I hired a great company responsible for both. All I have to do is enjoy the backyard and hot tub.
Also, because my shirts look worse after I iron them than before, I take them to the cleaners for professional care.
Yes, all of these services cost money but they give me back my time. Which is more valuable than the minimal monthly expense. Especially in the long run.
9. Pesky little expenses and monthly subscriptions.
Everyone has those pesky monthly banking or credit charges that they never get around to stopping.
My solution here is radical but I promise it works.
I called Visa, cancelled my card and asked for a new card. This caused an immediate stop to all pre-authorized credit card charges, like Apple Music, Audible, Globe and Mail, and several industry journals (that I never read).
Not only did I save more than $200 per month but I got rid of the annoyance. The downside to this approach is that you must also restart all the legitimate charges, which can be time consuming.
But it’s a great strategy to examine all those commitments and make changes.
That’s a quick summary of how I simplified my personal finances. Let me know what methods you have used by reaching out on LinkedIn.
Also, if you need help simplifying your personal finances, please give me a call or send me an email and we can begin working on giving you back your personal time while controlling your finances.
Never Retire Profile
If you enjoy sports, you may have seen Sister Madonna Buder—also known as “The Iron Nun”—in a Nike commercial that aired during the 2016 Summer Olympics. In the ad, the 86-year-old (at the time) is first seen kneeling in church in her professional capacity as Sister before she hits the road, swims across a lake, and then jumps on her bike. Buder is the oldest woman ever, at the age of 82, to finish an Iron Man Triathlon. She only began training at the age of 48 and has completed over 325 triathlons since. Now 90 years old, Buder continues to practice as a member of the non-canonical Sisters for Christian Community, a contemporary religious order that is independent of the authority of the Roman Catholic Church, while pursuing her passion for sport. Once asked about the secret to her success, she replied, “I train religiously.”
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