Since I graduated college (ahem, 16 years ago), I have been assembling a hodge-podge of financial accounts in different places – checking, saving, stocks, bonds, retirement, mutual funds, etc. Every month I had statements delivered to me from each of these places, making it difficult to keep track of what I had and where it was. This is how my account list looked up until 4 months ago:
Checking – Bank of America
Savings – Bank of America
Emergency Fund – ING Direct
Taxes Fund – ING Direct
Old Savings – Credit Union
Individual Stocks – Scottrade
ETF’s – Sharebuilder
Bank of America (inherited) Stock – Computershare
CA Tax Exempt Bond Fund – Commonwealth Financial
Mutual Fund – T Rowe Price
Roth IRA – T Rowe Price
That is an absurd amount of different accounts to try to keep track of. Add in the fact that my “salary” comes in the form of about 45 different 1099 forms each year, and tax time for me is a giant mess. So, in an effort to simplify my life, in the last couple of months I have worked really hard to get all these accounts consolidated down to the fewest number I could. And here is what it looks like now:
Checking – Charles Schwab Bank
Saving – Charles Schwab Bank
Individual stocks, including BofA stock, bond fund – Charles Schwab Brokerage
Emergency Fund – ING Direct
Taxes Fund – ING Direct
Mutual Fund – T Rowe Price
Roth IRA – T Rowe Price
I went from 7 financial accounts down to just 3, which makes my financial life a whole hell of a lot easier to keep track of. Why do we complicate things that could be handled so much easier? I also no longer receive any paper statements from any of my accounts (banking, credit cards, etc) and pay all my bills online. If you still have your accounts spread over way too many banks and are still receiving paper statements each month, I highly recommend consolidating and simplifying. It’s amazing how much time it frees up and headaches it eliminates!
Good advice. My husband and I consolidated my accts few years ago to:
1 checking
2 savings
1 investment
2 children’s college accts
2 work retirement accts
2 Roth IRA (retirement)
2 Traditional IRA (retirement)
1 other retirement acct
Sounds like a lot but we cannot merge any of those.
This past December, I consolidated my accounts to:
Checking – First National Bank
Money Market Savings – First National Bank
Mortgage – First National Bank
Credit Card – First National Bank
Roth IRA – American Funds
401k – Wachovia (employer dictates this one)
This was from:
Checking: First National Bank
Money Market Savings: First National Bank
Online Savings: FNBO
Billpay Account: FNBO
Checkng: US Bank
Savings: US Bank
HELOC: US Bank
Mortgage: US Bank
Credit Card #1: US Bank
Credit Card #2: US Bank
Roth IRA – American Funds
401k – Wachovia
At some point, all it seems like you do is transfer money from account to account. Since I was refinancing my house and have absolutely no intention of financing anything again, I didn’t mind taking the credit score hit by closing my long term credit cards and HELOC.
Not only does it consolidate your life now, it will seriously make life easier on your heirs when that time comes
Simplifying finances would be even better if you dealt with LOCAL banks, credit unions, and investment folk. Local banks have all the services, but they keep your money in your community.
@carol – Totally agree…
Mine are ALL within easy walking distance of my house – believe it or not! (within 10 city blocks)
I’ve just started to simplify my life and your blog is helping me a lot, thank you! At the moment I’m nearing the end of my debt payments, I think I have 2 months left until it’s paid up:)
Once it’s all done I’m closing my credit card account and opting for only a debit card and I have a hard-to-reach savings. I also might change my bank, my current bank has very high charges:(