The Money Hawk

15 Simple Ways to Achieve Financial Zen

Posted on 02. Dec, 2008 by Kevin Geary in Finance

The number one cause of divorce in the United States is money problems. I have a feeling it’s also the leading cause of personal stress. Generally, in order to de-stress our finances we try to either make more or spend less. That solves the big problems, but there are other things we can do to make managing our money a breeze!

Here are fifteen simple ways to achieve financial Zen:

1. Use automatic tracking software.

I would normally say to use any type of tracking software, but after signing up for mint.com’s free software it’s hard to recommend anything else.

Mint logs in to your online banking and automatically pulls your transactions. It then automatically categorizes them. You can also create a “budget” to help you stay on track with your spending. It tracks all types of financial accounts including investment accounts and HSAs.

It’s the best software I’ve ever used (I’ve tried pretty much all of them) and it’s free. You sign up, set up the accounts, and then sit back and watch it go. I check in everyday to look at balances, transactions, and my budget and that’s it. I don’t have to manually enter anything, manually categorize anything, or do much of anything else.

2. Extinguish debt.

Debt equals stress. If you’re looking to move toward financial Zen, you’re not going to make it if you’re dragging debt behind you. Use the debt snowball method to help you get out of debt quickly (it’s the method I used to pay off $32k in a year).

When you become debt free, you’ll instantly feel more Zen-ness coming over you!

3. Keep an emergency fund.

Having an emergency fund of three to six months of expenses directly translates to “peace of mind.” If you’re looking to be Zen, peace of mind is a must.

Put your emergency fund in a good online savings account. My favorite is ING Direct. You can open either an Orange Savings Account at 2.75% interest or an Electric Orange Checking Account at 1% interest. If you sign up for the Electric Orange checking account they’ll issue you a debit card which is very practical for an emergency fund.

4. Cut the fat from the budget.

Americans love to overextend themselves financially. If you’re like most people, I guarantee you’ve got a lot of services, subscriptions, and memberships that you don’t need (and probably don’t even use).

It’s time to cut the fat from the budget. Keep cutting until everything you don’t use is gone, everything you don’t need has been scrutinized, and you’re living on less than you make. If those three criteria haven’t been met, kiss Zen goodbye.

5. Embrace electronic access (bills/paychecks).

Why do you want to manually deal with bills every month? Let as many companies as possible draft the money straight out of your account. This allows you more freedom and consumes less time each month and insures that you’ll never make a late payment.

Anything that’s “automatic” is instant Zen.

6. Use online bill pay.

For those pesky companies that won’t do auto-withdrawal, set them up in your bank’s online bill pay system. Online bill pay lets you mail checks free to multiple people and companies at once. No more envelopes, no more stamps, no more licking.

7. Get your due dates changed and aligned.

Most people let companies set the due date on their bills for them. Why? Zen-like people don’t work on anyone else’s schedule. Call all the companies you pay each month and ask them to change the date to what works for you. If possible, get all the dates aligned so you can pay them all at once or pay half of them at the beginning and the other half later in the month.

8. Bundle services.

If possible, get your phone, internet, and television all bundled together. You might be able to do this with insurance also. Turning three bills into one will make your life that much easier and qualifies you to be a Zen master.

9. Put your investment portfolio on autopilot.

Does your investing style keep you up at night? The best way to invest is to take a systematic approach. Set up automatic transfers into your accounts and purchase long-term, cheap, safe investments like index mutual funds and ETFs. You’ll consistently beat 90% of people who try to beat the market, play stocks, or time the market and you’ll get more sleep at night as well.

The Zen master accomplishes the most with the least amount of effort.

10. Pillage your wallet or purse.

Have you seen the women with the huge purses? It’s like they’re carrying a suitcase under their arm. They’ve got makeup, a huge wallet with a thousand cards, keys, more makeup, a change of clothes, mase, a stun gun, a cell phone, an extra pair of shoes, and a Pomeranian.

That’s not Zen, that’s Hell. I’ve seen guys with pretty fat wallets too. Clean that nonsense out. Carry only the essentials. Besides, you’ll avoid back problems from having a thrift store hanging on your left shoulder or stuck in your back pocket.

11. Organize your accounts and records.

The older we get, the more accounts and records it seems we have. The key is to keep these organized. Have a central location with account records, account numbers, account passwords, and account details. Your spouse should be able to access this as well in case something happens to you. Having all your ducks in a row will help you greatly in an emergency and will limit your stress when you need to add, remove, or change something.

12. Get insured.

Remember back when we talked about the emergency fund and peace of mind? Well this is another must-have for peace of mind and financial survival.

If you aren’t sure what you need, read my article on The Five Insurance Policies You Must Carry to Avoid Financial Disaster.

13. Pay in advance when possible.

This works wonders for subscriptions and memberships. If possible, pay cash in advance for six or twelve months (or longer if possible). Make sure it’s something you actually use. Not only will you get a discount, you’ll avoid having to organize and pay that bill every month.

Making bills disappear while getting a discount on them is pure Zen.

14. Ditch your mortgage.

This is the best one, but it takes the most focus and time to accomplish. Pay off the mortgage! What would it feel like to kill your biggest financial burden? That’s true Zen!

The best way to pay off your mortgage in record time is to refinance to a 15 year fixed rate mortgage and make biweekly payments. This will kill your mortgage in no time and won’t put much extra stress on your finances.

15. Be on the same page (with your spouse).

Teamwork relieves stress, period. The first line of this article reads, “the number one cause of divorce is money problems.” If that’s not enough incentive to get together, figure this stuff out, and work as a team, you might as well get the divorce papers ready. And if you’re trying to get your finances in order and achieve financial Zen, a divorce is the last thing you need!

Some of these tips are more important than others but they all come together to create a stress free financial zone. Of course, there’s probably more ways we can achieve financial Zen which is why I’d like to open up the comments section to any readers who want to add a tip to this article. Share the best things you’ve done to achieve financial Zen in your life…

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