It’s not uncommon to accumulate things over the years when you don’t
take time to straighten them out periodically. This applies to our
finances as well as our possessions. If you feel it’s time to straighten out
your finances, consider these steps:
-Make a list of all your assets and debts. List each one individually,
so you have a sense of how many different accounts you have.
-Go through each one of your investments. Make sure you under-
stand why you own each one. Are you really adding diversification
to your portfolio? Assess the prospects of each investment and decide
whether you should continue to own it.
-Look for ways to consolidate accounts. Try to get down to one bank
account, one brokerage account, and one IRA. This can significantly
reduce the time needed to review and reconcile accounts.
-Assess your outstanding debts. Do you really need all those credit
cards? Consider keeping only one or two cards, so it’ll be easier to
monitor balances. Look for ways to reduce the cost of your borrowing. Is
it time to take another look at refinancing your mortgage?
Straighten Out Your Financial Accounts
