3 Easy Ways to Simplify Your Financial Life

Americans are racking up some major financial achievements — but not the kind you'd celebrate with a ticker tape parade.

Each of us now spends about 22 hours a year sorting out bills, account statements and other paperwork — more time than we spend helping our kids with homework or going to the movies, according to the Bureau of Labor Statistics. And last year we paid a record $16.3 billion in credit card late fees — small wonder, since the average household is now juggling 14 credit cards. Come to think of it, if we shredded all those bills and statements, we could have a ticker tape parade after all.

All this clutter is a by-product of a changing economy in which individuals are increasingly responsible for almost every aspect of their financial future. And while technology has made it easier to hunt down bargains, the downside is the tendency to jump on every great deal — and end up with a walletful of cards and a mailbox jammed with bills.

Taming the paperwork jungle has economic benefits as well as emotional ones: Andrew Caplin, an economics professor at New York University, found that people who plan and budget are, on average, 39 percent wealthier than their disorganized peers. With that in mind, we went hunting for tips that can help trim the time it takes to manage your finances. While these tips don't always represent the cheapest options, they can pay off in peace of mind — and long-term savings.

Simplify Your Savings and Investments

There's a reason Baskin-Robbins doesn't offer 8,031 flavors. Too much choice, like too much ice cream, leads to brain freeze. Case in point: 401(k) plans. When offered too many funds to choose from, almost 40 percent of workers don't save anything, according to Columbia Business School professor Sheena Iyengar.

In the long run, ironically, how much you save is far more important than which fund you choose. Over time, most funds "revert to the mean," with winners eventually having down years while also-rans get their act together. To be sure, real investment aficionados enjoy the homework that goes into finding a winner. But for those who'd rather skip it, most can meet their goals with just three funds: one domestic stock fund, one international stock fund and one bond fund. It also helps to stick with low-priced index funds, since high fees can hurt your returns.

Other Tips:

Some retirement plans offer "auto-escalation," which automatically increases the rate at which you're saving by, say, 1 percent a year. If you're getting regular raises, you'll save more without seeing your take-home pay drop.

No need to tweak: Accountholders only need to rebalance the mix of bonds and stocks in their portfolios once a year.

Simplify Your Credit Cards

Despite our nation's card-accumulating ways, life's usually easier for consumers who direct their spending toward one primary card, with just a couple of others in reserve. It's best to make the primary card a cash-back card — the fine print on airline-miles cards or other reward cards often makes it tough to take advantage of their bounty, and interest rates are usually higher. The best cash cards give a flat rebate from the first dollar spent, as opposed to a tiered program that gives progressively more cash the more you spend.

Why carry secondary cards at all? Because maintaining and using more cards tends to raise a person's credit score. Designate them for small monthly bills, such as a gym membership or cell phone, and pay the balance off in full every month.

Other Tips:

Placing cards on an automated-payment plan will minimize the chance of missing a payment.

To get a lower interest rate on balances, negotiating with your current card issuer is often easier than transferring a balance to another card.

Simplify Your Insurance

Americans are increasingly going online to buy home and auto insurance — by cutting out the middleman, e-salesmen offer discounts of 10 to 15 percent. But a one-size-fits-all automated policy can leave big gaps in coverage. That's why it's often worth working with an independent insurance agent. Good agents help consumers keep their property and life policies up-to-date, adjusting policies to reflect changes in life circumstances or property values.

Other Tips:

Save your insurance for the big stuff. Filing claims to pay for minor home or auto damage puts customers at risk of facing higher premiums.

Customers can often get discounts of 5 to 10 percent by keeping their auto and home policies with the same company.