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We have seen articles that suggest you should cancel all your credit cards. In three words don’t do it! A portion of your credit score is based on your credit history or how long you've had credit. When you cancel your credit cards you immediately have no history and your credit score will be lowered. If you cut up those credit cards you'll no longer be using them, you'll reduce the risk of identity theft, have fewer financial accounts to manage, pay less fees, and not have any interest charges piling up every month.
#4. If you're married combine your finances
What's the point of having to spend time managing two separate sets of finances? Whether one of you manages both sets or you’re each managing your own that's still a lot of time and room for confusion. Take the time up front to create one account of each type, one set of goals and, hence, one financial life. This will not only save time it will ensure that you're both on the same page in terms of your finances.
#5. Consider freezing your credit reports
You can save a lot of headaches by freezing your credit reports. This will limit access to your report, which will make it more difficult for anyone to steal your identity. You can do this fairly easily be calling the three credit-reporting bureaus – Experian, TransUnion, and Equifax.
#6. Create a budget using last month's income
This can work for three reasons. First, it solves the problem of effective budgeting if you have irregular income. Second, it sort of implies that you're a month ahead on your bills so that you have at least a small cushion. And third it lends itself to zero-sum budgeting as you’ll be allocating every dollar to a specific category at the beginning of the month.
#7. Fall in love with cash
According to FRBSF.org (Federal Reserve Bank of San Francisco), cash is the most used or second most popular payment method of consumers - regardless of their economic situation. Determine your discretionary spending for the next two weeks then go to your bank’s ATM and withdraw that much money. You may be surprised at how much less money you spend when you have to pull the cold, hard cash out of your wallet. Psychologically it's just much harder to pay cash than to write a check. Also, consider using the envelope method of budgeting. This is where you get actual envelopes and label them for each of your spending categories. You put the appropriate amount of cash in each envelope at the start of every month. When an envelope is empty that's it, you can't spend any more money in that category. What could be simpler?
#8. Batch pay your bills to simplify your financial life
The idea here is to arrange things so that you pay all of your scheduled bills on the same day of the month. It's much more complicated when your due dates are spread out and you could easily forget a payment. It's relatively easy to get your vendors to move your payment dates to a new one. In some cases, you'll even be paying early the first month, which they will like a lot. In any event, when you do this you'll have only one calendar date to remember a month and should never miss another payment.
#9. Track your spending at the point-of-sale
Use your smartphone or carry a notebook with you – whichever seems easiest – but track your spending at the point-of-sale. There's a big psychological difference between auto-syncing your spending into your budgeting software versus physically writing down your spending. When you track your spending manually, this should help enforce positive spending patterns and cause you to think twice about impulse buying. Just practice this for a bit and it should become second nature.
#10. Experiment with your saving
Experiment with having "no spend” days or fasting from different common purchases such as no daily Starbucks for a week, etc. Take some time to adjust to determine whether those recurring expenses are really worth it. If you have any must-have-it-now purchases add them to a 30-day list – and make sure that they are still "must have" after a month.
#11. Fund an emergency fund
Finally, if you want financial peace of mind this is probably the most important thing you can do. According to a study done by PWC.com, lack of emergency fund is the leading concern of employees. If you never created an emergency fund you have no idea how much less stressful life will be when you have one. You could treat this fund as just another form of insurance. Don't worry about interest rate or optimization. Just keep the money in your fund so that you know you'll be covered whenever one of life's little unexpected financial occurrences occurs. If you'd like some tips for building an emergency fund, here's a video that should help.