Keep it simple with credit cards, banks

One way to keep track of your finances is to limit the number of credit cards that you have, and try to deal with just one bank for all your financial needs.

When you avoid juggling multiple cards, and when you’re able to keep an eye on one or two accounts for expenses, you’re more likely to be able to detect your spending patterns and problems.

For many people that can be difficult especially if they have multiple accounts, credit cards and financing with various banks. The problem almost doubles when spouses have separate finances, and each is not fully aware of how much the other person is covering in terms of running expenses.

This lack of clarity can create a misunderstanding of how much disposable income is available for the family. Many money arguments between spouses can simply emerge from one party assuming that the other person can afford to spend or save more.

Even for one person with multiple sources of credit and accounts, keeping track of how much you’ve been spending can be a serious exercise. It needs extensive budgeting and planning to make sure that your perception of your spending is accurate, even when money owed on credit cards may not be required to be repaid in full immediately.

That is why it is important to take a step back and look at your bank accounts, credit cards, auto financing, mortgage, and whatever else to see if you can have them all consolidated in one place as much as possible.

Here are a few steps to get this done.

Balance transfer

Over the years, you may have accumulated several credit cards. Now every month, you have to take a look at them and see which ones need to be paid off, which ones you have not used, and for which you will only pay the minimum amount required.

If you’re doing so, you probably spending too much energy and time trying to figure out how much money you are actually spending on these cards combined every month, which can get even more complicated if you’re only paying the minimum amounts required on some.

To avoid this situation, try to get one credit card only. Take advantage of a time when your bank is offering an interest-free balance transfer, and move your debt to one card. If you don’t have any debts, then cancel the extra cards, and keep only one that has a high limit and in the same bank where your payroll account is.

Joint accounts

Consider having a joint account for you and your spouse for payroll and major running expenses. By doing so, you will be able to keep an eye on spending and determine exactly your combined income versus household expenses.

Joint accounts may not work, however, for spouses who want to keep their financial separate. In this case, transparency and communication are the alternative. Just let your spouse know how much money you’re spending and how you see your financial situation. The more details you share about your financial status, the better you will be in managing your money together.

Direct savings

If you’re using a current or checking account for your expenses, make sure that you’re not using this same account for your savings. The availability of funds can be tempting to make purchases that you wouldn’t do otherwise. That is why you should make sure that you separate your savings and your current accounts to make sure that even when you have to dip into your savings, your decision isn’t instant and take some conscious effort to complete.

If you are aware of the amount you’re able to save every month, have the bank deposit it directly into your savings account. Even if that is a small amount, you still will be able to build a good habit and hopefully a decent amount of savings in the long run.

The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.