Hi Friendos,
Today I am thinking about cash management and accounts and money flows. My last few clients have all wanted to talk about this and I understand why. I think lots of us start out with one checking account and one credit card and management of our small incomes is simple and fast, a couple hours a month maybe. Fast forward some years and now we have 4 checking accounts, 5 investment accounts, 2 savings accounts, and 7 credit cards. This one we opened because it offered $400 cash back. That one is old and we don’t use it but it still has $500 in it (not really sure why). Three different credit cards all have auto charges so those stay active. Slowly things became more complicated and now it feels hard to stay organized.
Years ago I read Marie Kondo’s book, “The Life-Changing Magic of Tidying Up,” and it helped me get a handle on clutter and become more intentional with physical things.
I recently bought a floor lamp that needed some light assembly and came with extra screws. Old me would have tucked those screws in my toolbox “just in case.” Hopefully I would label them (I was hit or miss with that, sometimes there was mystery stuff). New me still wants to keep the extra screws, but thinks, “the lamp is put together now, you don’t need the extras, and if somehow you did, you can go to the hardware store and they’ll hook you up.” So I got rid of the extras and avoided cluttering my toolbox.
Maybe you’re good with the amount of financial complexity in your life. Or maybe:
- You generally feel disorganized and want to change that.
- You’re having trouble making a spending plan (aka a budget) because there are so many different money movements happening.
- You want to track your spending but it’s hard when the spending is taking place out of many accounts.
- It feels time consuming to have so many account statements and bills to look at each month.
- You don’t actually look at all those bills/statements each month and are worried that you don’t really know what’s going on or maybe are paying extra fees from not staying on top of things.
- Account complexity uses up the energy you have available for money stuff and keeps you from making harder but more impactful decisions about your money.
Consider doing an account audit every couple of years to see if each account is “earning its keep” or if you should thank it for its service and close it out.
-Stephanie
p.s. Got any young people in your life who are starting their first full time job? Consider gifting them a custom session with me!
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