092 | Don’t Make It Complicated

One of the biggest misconceptions lawyers have about money and money management is that it has to be complicated.

If you think money has to be complicated, you’ll likely either avoid your finances altogether or make them more complicated than they have to be.

In this episode, let’s chat about what happens when we believe money is complicated, why money is actually very simple, and some tips to simplify your personal finances.

Topics Discussed

• what happens when we believe money is complicated
• the simple process for achieving your money goals
• tips to keep your finances simple

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Resources mentioned

Episode 83: Three Steps to Better Money

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If you’re ready to learn the mindset and strategies to master your money, let’s schedule a call.

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Email: hello@rhothomas.com

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Lightly Edited Transcript

Hey friend, welcome back to the show. I hope you’re doing well and having an amazing day so far. Today we are talking about the value of simplicity in your finances. One of the biggest misconceptions people have about money and money management is that it has to be complicated. And because people think may be complicated, what often happens is that you’re avoiding finance altogether. Right? I’m just not gonna do this at all right? Everything works out. Or they may get complicated by, for example, send up a super completed system, Electronic Arts, a lot of different counts, lots of credit cards, etc. And it’s so cumbersome to keep up with and it feels so daunting that they still would if I needed it all together. When you think something is complicated, especially something that you’re not used to doing, you’re probably gonna have a lawyer. I know most of us don’t like to do things that we don’t know how to do. And don’t think they figure out right. So if you think that money has to be complicated, and it’s this hard to understand thing, then you’re likely not gonna take the steps to effectively manage their money and you’re not gonna get that your money is going. You’re not gonna be diligent about not overspending and setting and staying on track your goals. You’re not gonna do any of that, because people get it seems like something that takes a long time and all that. So I will talk about keeping it simple. It takes more time and energy to manage your money when you’re making it complicated. Money is simple, so keep it that way. Don’t make it complicated. First, let’s talk about the process for managing our money. Well, I already shared the process back in 83. But if you missed it, there are only three steps to get better result of your money. Again, it doesn’t have any complicated. It’s really simple. The first step is to become aware of what you’re spending now. Where is your money currently going? The second step is creating a budget for yourself. This is just a plan for how you want to intentionally spend your money. Part of that plan is that you have money left over each month, at least step three, you’re gonna use that surplus that you now have each month to achieve your goals. That’s it, right three steps to manage your money better. And I promise if you implement the steps, the support says you’ll start making more progress toward your goals. So the overall process for managing your money IS simple. Now let’s talk about a couple specific areas of your finances that you can apply as well. The biggest one for many people is how many accounts they have. When my clients come to work with me a lot of them have a lot of accounts and they don’t really have a reason why. It’s just been like my paycheck goes into this account and my partnership goes into that account. And then we have the other account has a couple 100 in there. And we also transplanted this account every other week. And we have these three saved accounts. And we’re not sure which of our five credit cards we should use for which expenses, right this whole computer system and it gives me so much and leads to so much confusion and ultimately to inaction. I typically have my clients consolidate their accounts down, keep it simple. You don’t need a whole bunch of different accounts. You don’t need to be using a whole bunch of credit cards, especially if you don’t have a purpose for the accounts and cards, like one of my clients, they would tell me exactly why she had these multiple accounts. And it was a system that feels simple for her and she wants to keep it. She likes it. I love it. There’s no problem with that. So please hear me. I’m not saying it’s automatically bad. If you have multiple accounts. I just don’t want you to have a bunch of accounts for no reason, right the purpose behind it. Keeping it simple to really streamline a numbered account that you need will help keep you motivated actually look at your finances and manage money through your goals. So to give you an example, my husband I have one joint checking account, one point savings account, one joint credit card and then we each have one separate checking account and that’s where the fun money or allowance that I told you before it goes into and one person credit card. That’s what we use for our family spending. Right That’s it. It was going to go on this card. It’s a personal fund money kind of expense it goes on his personal credit card, and then the money from the checking account pays off my credit card, the money from the personal checking account, pay off the personal cards. That’s it. It takes us almost no time at all to get where money’s going. Because we don’t have to log into 10 different counts track it right we keep it simple. Keep things simple also makes it easier to actually take the steps to manage money better. So for example, I encourage my clients where they’re spending at least weekly numbers wanting to budget because it makes it easier to stay on track. Streamline your account makes it so much easier to track your spending weekly, is how likely are you looking about every week if you have to log into 16 different counts every time. Right it’s so much simpler to keep up with if you’re only looking at a two accounts. Reviewing or spending weekly also helps simplify your finances because it decreases the number of items you have to look at and keep track of and doing it only takes five maybe 10 minutes max versus basically everything is the end of the month. It might take a little longer it might be more overwhelming or daunting, especially when you’re starting out and you may be more likely to put it off. Now that’s not to say that you have to take a look at your finances weekly. As you get more into editing more use editing. We don’t look at hours weekly, but when you were first starting out looking at it weekly helps to make it feel a little bit simpler. The final tip I have for keeping refining this simple is to have certain days or financially things so I’m hesitant to pay all of our bills on the same day. We don’t have to worry about this bill is due or when that bill is due. And I started doing that back when I was in law school and I was managing real bills for the first time and missed the two day thing got some late fees. So I decided to put myself on a schedule where the first every month I pay all the bills and I never had to worry about getting that system set up was really helpful because then I didn’t have to worry about forgetting about a bill or when the money for particular bills that come out of my account. Everything’s taken care of my husband, I have continue that same system in our marriage as well. So we pay all the bills on the same day and there are payments on automate. We get some benefit for it like my husband’s student loan, there was a slightly reduced interest rate because it was on holiday so we did that. But beyond those few auto payments, the rest of them we go through and manually pay them on the same day and it makes it very simple. I personally like manually paying bills versus having everything on auto pay because you are more aware of your spending right versus having an auto pay you might not be paying attention especially you can better keep up with it when you’re going through manual payment. We also have set days that we look at our budget for the upcoming month to make sure that everything is set up we want it to be. That we move money after closing out the previous month’s budget. Set day that we check our net worth. And all these are the same every month so we know exactly what’s happening. It doesn’t take long because we don’t have all these accounts to check. Right we been doing it for so long know the process. We know all the things that we’re looking for, etc. So that is the case for keeping things simple and some tips for how to implement simplicity into your finances. Now, as I said before, if it feels complicated, you are gonna be less likely to want to do the work. So keep the process simple. Manage it simply and create the finances that you want. And if you notice I’m simple your finances start making progress to achieve your goals head to rho thomas.com/call and schedule your consultation. Alright, so that’s it for this week’s episode. Come join me over on social media I am most often on Instagram, I am rho Thomas and on LinkedIn, subscribe to the show and leave a review on whatever platform you listening on. Both of those things help on the show and I’d really appreciate the support. And finally, please share this episode with a friend or two who you think would find information. Okay friend as we close out, I pray that you take some time to consider where you’re making your finances more complicated than they need to be. I pray that you will lean into simplicity with your finances to get moving in the direction you wanna go. And as always, I pray that you continue to take steps to regain control your time, build wealth and live the life of freedom choice you deserve. Talk to you later.