Every year I try to minimize my possession and get rid of things slowly but surely.  It’s helped simplify my life and made me question “do I really need this thing I’m about to purchase”.

Simplifying your financial life is also something you should try.  Over time people accumulate multiple bank accounts, retirement plans, and way too many credit cards.

Here are my tips to simplify your finances:

Consolidate Your Banks:

When I was younger, I used to sign up for online banks for their promotional bonuses of $100 or whatever it may have been.  You might normally have to deposit $10,000 or something like that for a specified period of time.  That works out to 1% return on your money.  Not worth it when you can make that on a good day in the market.  Consolidating your banking can also help you meet the minimums to avoid fees at your bank.

Rollover Your Old 401(k) Plans:

Over time, you may find yourself with multiple 401(k) plans from having changed jobs so many times.  This can make it hard to keep track of performance or just remembering where your money is even sitting.  Set aside a little time and rollover all of those old 401(k) plans into an IRA.  It will make tracking your money easier, and you may find that it’s cheaper for your investments and you have better options available.  I personally like Ameritrade.

Eliminate Junk Credit Card Offers:

Tired of getting so many junk credit card offers in the mail?  Put an end to it with Opt Out Prescreen.  It’s free and legit.  I’ve done this personally for me and family.  I did the mail in option to permanently have my name removed from receiving credit card offers, now I practically never get any mail.  If I really need credit, I’ll go apply for a card I want.  Also, those junk card offers sitting in your mail box all day are just asking for trouble if your mail is stolen.  Which leads to:

Pull Your Annual Credit Report:

Get your free annual credit report here for free.  Again, this is the real site.  You don’t have to enter any credit card info.  This is useful for checking on any cards that may have been opened in your name or looking for any discrepancies in your credit report.  I like to access one of the reports every 4 months.  That way I can monitor my credit report all year round.

Check Your Credit Score:

You can get this free from one of your major credit cards.  No need to pay for it.

Close Some of Your Credit Cards:

Do you have 10 credit cards?  If you are not about to get financing for a house, car, or any other major purchase, it might be time to slowly close some of those cards down.  Pay off any balances, of course.  But do you really need 5 Visa cards, 2 Master Cards, and a few department store cards.  Slowly close down some of the cards over time, so you ding your credit score.  Pick just a few cards that have the features you really like.  I have 2 cards, Discover (because it’s my longest opened credit card and for the cashback) and a Visa card (because it’s accepted everywhere and has no foreign transaction fee).

Take Inventory of Your Financial Accounts:

This is simply in case you passed away.  For married couples, it leaves a trail for the spouse to know where the money is located.  Hey, for most couples, one person handles the finances, the other avoids it like the plague.  For this document, you want to list the name of the company, a phone number (and contact person if possible), account type, website, approximate balances, any info you think is relevant for your better half.  Don’t worry, my site has a bunch of templates you can use to get started.  Just maybe password protect the file.  Heck, you can even just go the pen and paper route and lock it in a safe.  Either way, just don’t forget to update this info as it changes.

Calculate Your Net Worth:

If you don’t know where you are, you’ll never know where you are going-Me

Take time to figure out your net worth.  If it’s negative, read my site and the hundreds of other financial independence sites on ways to lower your cost of living, make changes, and get it heading in the right direction.  If it’s already positive, congrats.  Keep it growing.

And yes, I have a template for you.  Adjust it accordingly.  Update it as you see fit.  I only update mine every few months these days.

These are some of the things I’ve done to simplify my financial life and do kind of a spring cleaning.  I’ve greatly reduced the number of companies I have to deal with, and the side benefit is the few companies I do business with value my business with free perks like cash, tablets, or free trades.

Something else I’ve taken time to do, is eliminate old paper tax returns.  I’ve scanned all of those documents and what used to take up several boxes, is just megabytes on my computer hard drive.  The less clutter of having a box of crap in the house is a refreshing feeling.

What things have you done to simplify your financial life?  Sound off below.

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