Sleep-Well-at-Night Finances: My Aggressively Simple Financial Strategies
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“Sleep-Well-at-Night Finance series” essay list
When it comes to finance, I want transparency.
And yet we - and I include America as much as Britain in this - are so crap at being financially transparent. Money is still a taboo to talk about, whispered in hushed tones, if it’s talked about at all. Just this week my friend told me she found out a guy at her company at the same level as her earns £30k more - because her company is not transparent.
So I try to do my best to be transparent in my finance writing. I put my money where my mouth is, as it were.
As such, this week I want to share with y’all my financial setup. How does it look on a daily basis? What principles do I abide by?
Make no bones about it - it’s simple. Some might say aggressively so.
But it works (for me at least).
Zero debt
No car payment, no mortgage, no credit card debt, no consumer purchases debt. Zilch.
It wasn’t always like this - I used to have a mortgage and a credit card but when I decided I wanted a simple finance strategy, the debt - especially the consumer debt - had to go.
Debt is the sort of thing people will still argue about when the second coming is happening outside their window. Is it good, is it bad, is it necessary? Just mention the word and people go crackers with their opinions.
Wherever you stand on the good-debt/bad-debt argument is up to you. But there’s one thing I know about debt that frankly makes the argument kinda moot:
Debt takes up SO MUCH brainpower.
It’s always there. You’ve gotta budget for it. It’s in the back of your mind every time you make a purchase. Once it grows, it can steal your sleep and your well-being. You have to think about it all the time.
Not exactly simple living-friendly.
So I prioritized eliminating the debt. What I get in exchange is peace and simplicity. I know, I know, the good-debt advocates will tell me that I could use debt to make more money.
But debt - especially consumer debt - can’t give me peace of mind.
And that - IMHO - is more important.
A singular checking account
Some people have multiple bank accounts designated for different budgets and that works great for them.
Personally, I find multiple bank accounts stressful. As such, my husband and I have one current (checking) account between us. I love it because when I’m out and about ready to splash the cash, I can instantly see how much I have to play with.
That’s not to say I only have one account. I also have a business bank account, savings accounts, and one for foreign currency payments. But all of that feeds this singular checking account.
With a singular account, there are no surprises which keeps my financial life simple AF.
A simple savings and investment strategy
Before I start here I’m going to disclaim that this is not financial / investment advice. I’m simply stating my strategy. What works for me might not work for you.
When it comes to savings and investments, I keep it very simple indeed. As I’ve talked about before, I’m an ex-FIRE advocate, and whilst a lot of that has fallen by the wayside, investing in index funds has stayed the course.
Almost all of my savings are held in environmentally and socially responsible index funds. I have just two investment accounts, one ISA (the British equivalent to a Roth IRA), and one taxable account.
I also have an emergency fund held in Premium Bonds, a quirkily British government savings scheme where you don’t earn interest but every pound goes into a lottery to win prizes from £25 to £1m every month (I’m still holding out for the big million…)
I don’t pick individual stocks, that’s too risky for my blood. The nearest I got was dabbling with crypto a while back but let’s not talk about what happened there too much.
I’m an invest-and-forget kinda woman. It lets me sleep at night.
I track all my expenses
I’ve said it before and I’ll say it again, tracking expenses is one of the best things I’ve ever done for my finances.
I love tracking so much, I want to share my template with you:
TRACKING SPREADSHEET EXAMPLE (this is via Google Sheets. If you have trouble opening, email me and I’ll send in a different format).
Tracking every penny might seem anal and it kind of is. But it works because it lets my gut do the talking. If I spend 30% of my disposable income on going out in a month for instance, and I think that’s too much, I’ll reign it in.
It’s an amazingly effective way of halting unnecessary purchases.
I wanted to write more this week, but as I was racking my brain for another part of my financial strategy, I realized. This is kind of it. Because it’s simple.
It took a while to create such a straightforward strategy. 6 or 7 years ago it looked like a complicated mess. As I said a few months ago in a guest post for
:For many people, simplifying finances doesn’t happen overnight.
But you are allowed to want (and should be encouraged to have) simple money goals, and simple strategies to realize them.
Money has become complicated but that doesn't mean it has to remain so.
Simple financial strategy = sleep well at night.
Boom.
This article is intended for information and entertainment purposes only and should not be considered investment or financial advice