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

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 (including many SmartMoney readers) 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.