The Advantages of a Simple Plan

When people set out to make a budget or adhere to a financial plan, they sometimes make things so complicated that they have no chance of success. They set up accounts at many institutions, they open ten credit cards to maximize the rewards, they make too many rules about what can and cannot be bought, and they try to divide their budget into too many categories. As a result, they end up with a financial plan that is too complicated and that even they don’t understand.

When a financial plan/life is super complicated, you don’t want to deal with it. The thought of balancing all those accounts, paying all the different credit cards and dealing with the rewards, tracking all the budg

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4 Responses to The Advantages of a Simple Plan

  1. Larabelle says:

    Amen sister!!!
    I totally agree!!
    I do not see how anyone keeps straight everything when they have a thousand and one different categories for their budget.

  2. snshijuptr says:

    I wish that free budgeting software would allow this. Mint.com and Quicken Online force you to have a ton of different categories. I only need about 10 to cover everything. I don’t want to have to look at 20 different categories with 5 sub-categories each.

  3. Hilary says:

    I completely agree – I used to have a ton of savings accounts, and it was just way too much of a pain. I’ve finally cut it down to one checking account with a linked savings account, as well as a SmartyPig account with several “goals” within it. That seems to be a good balance to me.

    @snshijuptr I disagree that Mint.com forces you to have a ton of categories. You can choose which you see and which you budget, and can just budget the “macro” categories rather than the “micro” ones.

  4. Gail says:

    Having too many accounts for IRAs can cost you if you have to pay yearly service fees also.

    For years I have been working at simplifying things and this year was the quickest I have gotten my taxes done for a very long time. I’ve started paying many things on line as that saves on stamps every month. I’ve had a simple notebook system in place for years now to make sure each bill is paid on time and because some only come yearly, I have learned at the beginning of the year to input those into their usual monthly spot so there is no surprises. It was a huge help this year when our business insurance bill got lost in the mail and I realized 3 days before it was usually due that we still hadn’t gotten an invoice. I was able to go on line and pay the bill on time, saving who knows how much misery and problems.

    Having a simple system and keeping up with the system makes it a habit after awhile that keeps you on your toes from spending when you know that you have other bills coming up that the money is earmarked for. Very tempting this year when our tax return came (this is rare for us) to go off an have fun, but since it had already been earmarked for certain projects, that is where it went. Simple, easy and no stress. Maybe we might get one evening out with it and since we haven’t been out in several weeks (our anniversary) it will be a treat instead of the usual hohum “its Saturday where do you want to go?” deal that many people seem to do.

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