My Financial Account Tidying Up Checklist

kondoI suppose it’s not a good sign that in the middle of reading a #1 NYT bestselling book on organizing your stuff… you lose the book in all your stuff. In case you haven’t heard of it yet, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing by Marie Kondo. In my defense, it is a rather small book. I hope I don’t have to buy another one.

Instead of spending more time looking for it, I decided to make a list of all my financial items that could use some decluttering. As someone who loves to try out new financial products, I tend to accumulate accounts in during bouts of enthusiasm. Part of the “Kondo-ing” process is going through things by categories (i.e. clothing) and not moving onto another category until you’re done. Most importantly, you should only keep things that “bring you joy”. Hmm… how about “bring me profit”?

Bank accounts

  • Close out inactive bank accounts which are unlikely to offer good interest rates or other benefits in the future.
  • Re-examine all automated transfers (direct deposit, 401k contributions, 529 contributions, auto billpay, etc).

Investment accounts

  • Close out idle brokerage accounts.
  • Merge all speculative activity into one brokerage account.
  • Consider liquidating all positions smaller than a certain size.
  • Merge smaller 529 plan accounts and/or change beneficiaries.
  • Check up on LendingClub and Prosper P2P lending accounts. These should be nearly wound down.
  • Check up on Patch of Land crowdfunded hard money lending account.

Credit card accounts

  • Close out accounts which will not justify the annual fee based on my planned activities for the next year. Decide ahead of time which ones to keep if they offer to waive the annual fee for another year.
  • Mark on calendar any special perks or benefits which still need to be used.

Gift cards

  • Redeem Visa/Mastercard/AmEx prepaid cards into Amazon gift card credit.
  • Think of ways to use up retail gift cards; add to calendar to be finished next two weeks.
  • Decide what to do with unused retail gift card. Sell at loss? Wait until year-end 2015 and use for gifts?

Not-going-to-do list

  • I still haven’t gone paperless and have no immediate plans to do so, but I already have a pretty good system for organizing my paper statements.
  • The same system already has me examining all expenses on a monthly basis.
  • I’m happy with my core investment portfolio. Relatively clean and simple.
  • I don’t have any old 401k or IRA balances floating around. We have an active 401(k) at Schwab PCRA, Solo 401(k) at Fidelity, and IRAs at Vanguard.
  • I’m happy with our core monthly cashflow setup. We combine finances and have one joint checking account where we deposit a set amount each month and pay all bills from that account. We make additional transfers if we have larger one-time expenses like a new roof or something.

I’ll try to update as I work through this list.

Comments

  1. Can you speak more about this: “I’m happy with our core monthly cashflow setup. We combine finances and have one joint checking account where we deposit a set amount each month and pay all bills from that account. We make additional transfers if we have larger one-time expenses like a new roof or something.” ? Recently married and unsure how to combine and work with joint accounts.

    • Our basic plan was to live on one income (lesser one). So that paycheck went into our joint account. All bills paid from joint account. Other paycheck went into another joint account which funded various savings goals. All money is considered communal.

  2. Can you share your system for storing paper statements? I have no plans to go paperless but I hate to file almost as much as I hate to shred.

    Thanks.

    • I have nothing special, all of my bills are due around the 6th to 10th of the month. So at the end of the previous month, I collect all my paper bills, sit down, and go through each one line by line and pay them online. Takes under 20 minutes and I can see what I’ve bought with the credit card breakdowns. My online billpay then shows me our total expenses that month, be it $2,000 or $4,000 or whatever. I then file the paper statements into a office filing box. At the end of the year I get rid of things I don’t need for tax purposes, like my water bill.

  3. Love this! I used the book for a whole blog post about doing it with my clothes, it does make my life visually and energetically “richer” – without having to buy anything. I also used it to help me take the emotional leap from 2500 square feet to 673 square feet. Cheaper housing that I still enjoy living in. http://www.moneyinreallife.com/2015/05/financial-freedom-decluttering-your-way.html

    And just to add for NM — I use a sinking fund savings account for all big expense like vacation and healthcare. Each savings account is in an online savings bank, and I just transfer a certain amount each month into it for each expense. Funny how “real” you get about your money when you start doing this. Almost 30% of my monthly expenses are not foreseeable for that month. So it’s easy to blow a budget if you don’t do this.

    Thank you for this blog! I’m really learning from it,

  4. Michael says:

    Just a note about “old, unloved” credit cards. It seems certain cards are getting new perks even though you can no longer sign up for them. Consider it the long-time loyal card holder discount. My wife and I both have the Priceline 2% card available a few years ago, but recently they’ve added a 10% bonus for travel reward redemptions and have a few quarterly bonus spend promos. We both use this card extensively yet, but I’ve seen a few other retired cards get better perks, sometimes because you don’t use them.

  5. Regarding redeeming prepaid gift cards: Whenever I receive a rebate in the form of Visa/MC/Amex gift cards, I use them to pay utilities online (elec/water/phone) so it is easy to use up to the exact amount. Even if my monthly bill is below the amount of the gift card, sometimes I will let the utility company carry a negative balance, since it is something I will always be “purchasing”- just to ensure you I’ll leave gift card balances unused.

    • That’s a good plan, I buy stuff regularly from Amazon like baby food and diapers so the gift balance is always used up shortly. My local utilities (elec, water, sewer) almost all place a surcharge when paying with credit card, other than cable and cell phone.

  6. Italiangirl says:

    If I get rid of old (1 year or more) that I’m not using , I’m wondering if that’s not so good for my credit in general?

    • If there is no annual fee, I don’t cancel already opened cards. As long as there is no activity, usually no statement is generated so no hassle. Having a longer average account age and lower credit utilization ratio (used/available) helps your credit score.

  7. I have SO much decluttering to do and in so many different categories, but I call all my finance, bills and whatnot “paper” (yes I also have paperless stuff too, but even my paperless accounts have an entry in my special book). Bills (of all kinds), birthday party invitations, school reminders, and just masses of “other” stuff, coupons, flyers, etc.. I am always overwhelmed but I’m frightened to throw paper away. I have a list of my 6 – 10 important bills which I pay regularly, and then once a month I go through the paper and get anxietal! I really hate this, but it’s my way.

    I also have too many clothes, though I rarely buy any — can’t understand this. I guess at a certain age the accumulation of items just accelerates. I don’t stain or rip anything. I don’t break things either like when I was young. Throwing away a perfectly good TV really bugged the **** out of me, but who watches analog anymore? The only way I feel happy about giving away stuff is when my kids outgrow things. And the books!! I haven’t the slightest idea what to do with them.

    Looking back I think one of the biggest mistakes I ever made was buying one of those Ikea shelf things which helps you store stuff. I thought I’d be neater that way — instead I stuffed every drawer full of things that I can’t get rid of. And old pocketbooks that have credit cards in them with exp. dates from 2005! But this is all I really need to do: pay the mortgatge, pay the utilities, pay my credit cards, and pay insurance(s). All my investments, let it ride (for now anyway). Financially, I’m up to date, but personally I’m a mess!

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