As soon as you put the word “financial” in the title of an article, many people click away, assuming that the topic will be expressed in arcane mathematics that requires an MBA to understand. Because so many people run from any mention of finance, writers walk a fine line between simplifying and misrepresenting financial concepts. For example, evaluating a stock is not particularly easy and it does involve learning some math, ratios and other homework. That said, there are many financial concepts that, judging by the piles of articles out there, have been made out to be much harder than they really are.
There are entire books, blogs and tutorials dedicated to budgeting. Whether you call it a budget, a spending plan, a financial tracking plan or whatever, budgeting simply means being aware of where you are spending money. It’s really not that hard to do, and online banking, debit cards and software have made it easier than ever before.
If you don’t have that option, you can go old school and collect receipts for every transaction and then tally them up monthly (or weekly or daily if you’re feeling keen). Your tally will tell you if more is going out than is coming in. If more is going out, you need to cut somewhere. If you have extra, set some aside until you have three to six months in easily accessible funds. Once that is done, you can do all those fancy maneuvers such as setting saving goals and so on, but as long as you have a cushion and are spending less than you make, you’re in pretty good shape in the short-term.
If you have only one source of income, you can definitely do your own taxes. There are lots of articles and books about odd deductions and credits, but they often end up drifting towards tax benefits for business owners (who are likely paying someone else to do their taxes).
If you don’t feel like slogging through the paper copy with a pencil and a calculator, the tax software out there reduces doing your own taxes to a matter of data entry. Some of the software even prompts you to consider deductions you may not personally know about, which are updated yearly according to changes in tax law.
Estate planning is nowhere near as complicated as it sounds. If you have more debts than assets, estate planning is incredibly easy, as it comes down to a well-thought-out will and enough life insurance to cover your debts and provide for anyone you’re leaving behind. Your lawyer comes in at the end to make sure everything is legal, but estate planning is really all about you and your wishes.
For most people, the best thing is to pick up a will kit and work through it before going to a lawyer. To be clear, a will kit shouldn’t be the end point of your estate planning, especially if you have children, but it gets the basics out of the way so the lawyer can focus on specifics of your estate. These include details such as how you would you like your children raised if you die while they’re minors and so on. If you have enough assets that estate taxes are a serious worry and you need a gifting strategy or to set up trusts, then you can afford to have a professional estate planner take care of it.
The Bottom Line
The goal of this article is not to minimize the real anxiety that people feel about finances – it is intended to put things into perspective. In reality, all of these things are easier because of advances in software and the free flow of information over the Internet, but their reputation for difficulty hasn’t diminished much. That said, as more people start to use the plethora of tools available, the thousands of books and articles on these topics will look as quaint and outdated as a cell phone that only makes phone calls.
This article was originally published on Investopedia.com.