Decluttering is certainly a popular concept these days. So why not go all “Marie Kondo” on your finances? What should you keep, pitch, or consolidate? Paul Fain, Knoxville Certified Financial Planner and President of Asset Planning Corporation, has some tips for how to declutter your finances this week on WBIR’s Sunday Money.
THE STUFF JUST PILES UP DOESN’T IT?
We all fantasize about KISS – keep it simple stupid. But as time goes by we accumulate:
- Accounts and policies
- Statements and documents
- Service relationships
WHERE SHOULD WE BEGIN DECLUTTERING OUR FINANCES?
Review your checking and savings accounts:
- How many banks and bank accounts do you need?
- Yours, mine, ours?
- Compare fees, interest rates, and any other benefits
- FDIC insures up to $250,000 per depositor per bank
WHAT ABOUT INVESTMENT ACCOUNTS?
Consider consolidating your investment accounts with one company:
- Taxable brokerage accounts,
- Tax-advantaged retirement accounts or
- Special accounts for things like college savings.
Gives you access to all the accounts in one place, you’ll be able to see how they all work together, which will help you stay on top of your overall asset allocation and investments.
WHAT ABOUT CREDIT CARD ACCOUNTS?
- Close credit cards with caution.
- Could affect your credit score (credit utilization ratio).
- Which ones do you really use? What is each card costing you in terms of annual fees and interest rates?
- Carry only the ones that suit your current needs.
Decluttering your accounts may not exactly spark the same sense of joy Marie Kondo describes when you clean our your closet, but in the long run it can make your financial life easier to manage and give you a greater sense of security.
FAST MARKET FACT: Typical Household Accounts
Bank Accounts 3-4
Financial Advisers 3-5
Retirement Accounts 3-6
Insurance Policies 5-10
QUESTION FOR OUR MONEYMAN?
Want to learn more about how to declutter your finances? Do you have other general questions about financial planning, investing, or retirement planning? Send your questions to our Knoxville Certified financial planner Paul Fain or directly to Paul@assetplanningcorp.com!