It’s summertime, and the livin’ is easy! Isn’t that what the song says?
So, why do we feel that our lives are too hectic, our homes are too cluttered, and our stress levels are too high? I can’t attempt to solve all of these issues in one article, but I believe that small steps can lead to big rewards.
With that in mind, let’s take it one step at a time and look at some areas of your life you can simplify or organize. Select any of the suggestions below that appeal to you.
CLOSE ACCOUNTS: If you have six bank or credit union accounts, choose your favorite and close the rest. If you have multiple investment accounts that could be merged, choose your favorite firm and close the rest. Old 401(k) accounts can be rolled into an IRA, and appreciated assets inside taxable accounts can be transferred from one investment firm to another without triggering taxable gains.
The days of getting a free toaster when you open a bank account are long gone, but I routinely see people with six or more bank accounts. I once had a new client who had 13 investment accounts scattered among different firms. Your focus should be on simplifying your life. If closing bank accounts seems overwhelming, go to the bank or credit union you have chosen to maintain, and ask them for their help.
AUTOMATIC PAY: Set up automatic deposits and electronic billpay in the account you have chosen to keep. Depending on your comfort level with technology, paying bills online can save significant time and effort when compared with writing and mailing checks. Ask the bank or credit union to help you with this.
BEGIN SAVING AUTOMATICALLY: Much like with a 401(k) (where money is swept into your account before you receive your paycheck), do the same thing with a taxable investment account or a Roth IRA. The primary path to financial security is through saving, so make it a priority. This will simplify your life (and reduce your stress) because you will no longer fret at the end of each month when there is nothing left over to save. This supports the adage “Pay yourself first.”
CLEAR SPACE: Summer is perfect for setting aside a few blocks of time, such as a Saturday afternoon from 1-5 to organize an area of your home. If you can’t find a half-day, use a kitchen timer and set it for 60 minutes.
I recommend you start with a project where you will quickly see improvement. This may be cleaning an entry closet or your clothes drawers. Or it may be dealing with the pile of mail that has grown into a tower.
If you start with a closet, take everything out of the closet first. Create three bins for “donate, throw away or keep.” Then put the items you want to keep back in the closet. Follow through and donate or toss the other items. If you donate items, ask for a receipt from the charity for tax purposes. If you itemize on your taxes, the value of your donations may be tax-deductible. Or, plan a garage sale and use the proceeds to help pay for a summer vacation.
The key to success is to focus. Don’t get distracted and start working on a different project. Julie Morganstern, author of “Organizing from the Inside Out,” calls this zigzag organizing. We’re all guilty of this. We see something in the closet that leads us down the proverbial rabbit hole. Before we know it, we’re cleaning out a drawer in the kitchen! Visualize a closet that is no longer cluttered (and only 80 percent filled). Once the closet is decluttered, you can move on to other parts of your home or office.
Make the decluttering project a family affair. Set a half-day and ask the kids to work on cleaning their rooms and ask other family members to clean out a part of the garage or the home office. After the half-day is over, show each other your progress, and celebrate together with a pizza for dinner, a cookout or an evening playing Scrabble together.
If you clear away much of the clutter in your home or office, you will likely discover that the benefits are much greater than you had anticipated. Clutter has a corrosive impact on our lives which increases our stress levels. Some people have speculated that clearing out the clutter frees up space for wonderful changes in your life.
SLOW DOWN: If you feel like everyone in your household is running in different directions, commit to saving at least one evening a week for a family meal at home. (Use the summer to establish this habit.) This provides an opportunity to focus on each other and slow down the hectic pace.
Have rich conversations with your kids (or grandkids) about money and values. Describe your work and savings history, share family stories about relatives who lived through the Great Depression, discuss the rewards of helping others who are less fortunate, and talk about the dangers of “keeping up with the Joneses.”
I am often asked how adults can teach their kids about money. Recognize that your kids (or grandkids) are watching you, and you can be a powerful role model. Discussing money openly is a great place to start.
If you accomplish any of the above five suggestions, don’t forget to celebrate!
Donna Skeels Cygan, CFP, MBA, is the author of “The Joy of Financial Security.” She has been the owner and financial planner for her own firm in Albuquerque for 19 years. Visit joyoffinancialsecurity.com.