On many levels our finances are not complicated, but I started thinking about how to convey our accounts to my husband and it sure sounded complicated! I'm not ready to make big swift changes, but I think we have some room for improvement.
The first change has already occurred. I transfered over $7,000 we had in second checking account with our bank, USAA, to our money market savings account. There was really no reason to have that amount of money sitting in a checking account earning nearly no interest when we could have it combined with other funds at a second bank and earning closer to 1% interest. I'm scared to check rates right now since they are dropping! But I do know it will always be better than what that checking account earned.
This account at the second bank is primarily our emergency fund. It is money we want access to at any time, but don't regularly need or dip into. So while two banks (we actually have three) doesn't seem simple, the way we use them is. And since I mentioned it, the third bank is where we have more cash parked in a few CD's (certificates of deposit) earning even more interest. So each bank has its purpose and reason for being!
A few other things we are considering for finance simplification, is closing some credit cards, paying off our daughter's car loan and moving two accounts with one mutual fund company into the other one where we have most of our investments. Quite a few years ago now, credit card companies were offering rather large cash incentives to open cards. We did our fair share of taking advantage of those and the number of cards we have is more than needed. It will take a little time to make all the decisions, but I sure like the idea of simplifying things.
What could you do to simplify your finances? Cut some expenses and or subscription services? Combine investments or cash savings? How about debt? Not making debt payments is so freeing!
In the fall, we worked on consolidating our mutual fund accounts to one fund company. I also closed some credit cards. Just trying to simplify.
ReplyDeleteYes, we have just two relatively small accounts with one mutual fund company that I would like to let go of. One is a UTMA for our youngest and probably should be sold as I expect we may use in the next year, and the other is a retirement account that we could transfer in with our retirement accounts at Vanguard. It will feel good to get it complete.
DeleteWhen we moved to a new state, I tried to consolidate the 529 accounts for the boys. But the old state told me that I would have to forfeit the 'earnings enhancements' (their contributions) to the account if I closed it. I kept the accounts in place not to lose any money. But when each boy started college, that's the first account I tapped. This Fall I'll deplete the last old-state 529 account and then close it. I'm looking forward to that. It's like decluttering.
ReplyDeleteThat was a good plan to work around the consolidation as you needed them, but you still received the tax benefit! Yes, so much like decluttering, which I also love.
Delete