One of my goals for the year is to simplify my financial life. To turn a web of connected accounts into something that is easily understood without a complicated explanation.
I feel like you should make this a whole series Andre.
1. Simplifying accounts (getting rid of accounts which don't add value).
2. Communicating where the money is, and how to access it.
3. Documenting & educating on taxes (where to get tax forms, how they're used).
4. Documenting & educating on investments (what you invest in, and why, and how that should change in the future if at all).
5. Documenting & educating on spending (how you take money out, how / where you sell from)
For example, I have a step-by-step document on our taxes, including links to references of why I do things a certain way. This is useful for me each year so I remember. It's useful if I ever get audited, because I can point at the references if the IRS says I'm wrong. And it's useful to my wife if she ever has to take over the taxes without me around.
Ohh, I really like the idea on adding in the extra documentation. I know I personally reference my own writing all the time. It makes perfect sense to got to that level of detail with the added bonus that it would make a great series.
FWIW, I started on simplification in 2023. About 3 months later, all the accounts were consolidated with Fidelity and it's been a breeze to manage finances. This setup also helps at tax time when we have exactly one set of tax forms to use.
I began doing this last year, as well. Just that I don’t want to close any of these old accounts because I don’t know when I’d need to look them up for some transaction/s I did several years ago. So I’ve left a nominal minimum balance in each of these accounts and left them open.
BTW, which online checking & HYSA are you keeping open? I’ve had the Ally Bank accounts as my primary Checking & HYSA accounts, even though there have been several other ones that offer a ‘slightly’ better rate - such as Wealthfront. But I’ve shied away from them just to keep myself from opening one more account to track. Instead, more recently, I’ve begun investing in TBills & CDs directly from my Fidelity account. This keeps it cleaner too — all investments (including Emergency funds) in Fidelity and all expenses in Ally. Oh yes, I do, too, have a local bank account with Wells Fargo just in case I ever need it.
I feel like you should make this a whole series Andre.
1. Simplifying accounts (getting rid of accounts which don't add value).
2. Communicating where the money is, and how to access it.
3. Documenting & educating on taxes (where to get tax forms, how they're used).
4. Documenting & educating on investments (what you invest in, and why, and how that should change in the future if at all).
5. Documenting & educating on spending (how you take money out, how / where you sell from)
For example, I have a step-by-step document on our taxes, including links to references of why I do things a certain way. This is useful for me each year so I remember. It's useful if I ever get audited, because I can point at the references if the IRS says I'm wrong. And it's useful to my wife if she ever has to take over the taxes without me around.
Ohh, I really like the idea on adding in the extra documentation. I know I personally reference my own writing all the time. It makes perfect sense to got to that level of detail with the added bonus that it would make a great series.
Looking forward to seeing the final list that includes the minimum number of accounts for brokerage, 401k, etc. We also have too many accounts
👏🏻👏🏻👏🏻👏🏻 I am so excited to hear about this journey.
FWIW, I started on simplification in 2023. About 3 months later, all the accounts were consolidated with Fidelity and it's been a breeze to manage finances. This setup also helps at tax time when we have exactly one set of tax forms to use.
This was originally my plan until Fidelity started taking 21 days to clear simple deposits. I am not going to let them hold everything right now.
I began doing this last year, as well. Just that I don’t want to close any of these old accounts because I don’t know when I’d need to look them up for some transaction/s I did several years ago. So I’ve left a nominal minimum balance in each of these accounts and left them open.
BTW, which online checking & HYSA are you keeping open? I’ve had the Ally Bank accounts as my primary Checking & HYSA accounts, even though there have been several other ones that offer a ‘slightly’ better rate - such as Wealthfront. But I’ve shied away from them just to keep myself from opening one more account to track. Instead, more recently, I’ve begun investing in TBills & CDs directly from my Fidelity account. This keeps it cleaner too — all investments (including Emergency funds) in Fidelity and all expenses in Ally. Oh yes, I do, too, have a local bank account with Wells Fargo just in case I ever need it.