View Full Version : Simplifying one's financial life
Recently Tradd suggested something and I thought what a good idea, and I did it. It was to bring up the balance of checking accounts to a minimum of 2000, so as to have a nice margin in there. So I did that with my main checking accounts, and it also helps to keep my spending in check, so I don't fall below that threshold.
This is a good example of a little thing you can do to simplify your finances. What kinds of things do you all do, suggestions for ways to declutter your financial life a little?
happystuff
12-11-24, 10:41am
I also tend to keep a higher balance in my checking - mainly for those unexpected things that I don't want to take money out of savings for.
Don't know if this is decluttering finances, but I also tend to use my cash-back credit card for groceries and gas, but then I just let it accumulate - kind of "credit and forget it" - LOL. Last time I let it sit for about a year and was able to pay off an entire 2 months of card balances/charges! That was nice.
pinkytoe
12-11-24, 11:15am
I need to do a lot of simplifying of financial stuff-hopefully by year's end. Moving several small funds to one institution would be a start. An example is that vacation pay I got when I retired 8 years ago. It has doubled since then but will be taxable so there it sits.
iris lilies
12-11-24, 11:30am
I’m not sure I need to simplify – yet. We did a fair amount of consolidation, recording, etc., when we put together our will and trust several years ago. But then we opened yet another bank account in Hermann because we needed a local bank to vouch for credit purchases at the local lumberyard.
January is a month where I sit down and rework documentation of our finances and household. Maybe I will look to see if there’s something that can be eliminated. I think DH is on board with cutting down accounts. Between the two of us we use 3 brokerage houses with multiple accounts within, for instance. That’s not going to change, but we can look at bank accounts anyway.
I know I will never go down to one or two checking accounts and one brokerage account. That is too simple for me, at least at this stage.
But I did empty out one tiny brokerage account and moved the money into a different one. Now I have to actually close the brokerage account itself, just aren't any branches of the bank in this state.
I need to do a lot of simplifying of financial stuff-hopefully by year's end. Moving several small funds to one institution would be a start. An example is that vacation pay I got when I retired 8 years ago. It has doubled since then but will be taxable so there it sits.
But if it is taxable why can't you move it to the same kind of account--so into a Rollover IRA, for example.
I also tend to keep a higher balance in my checking - mainly for those unexpected things that I don't want to take money out of savings for.
Don't know if this is decluttering finances, but I also tend to use my cash-back credit card for groceries and gas, but then I just let it accumulate - kind of "credit and forget it" - LOL. Last time I let it sit for about a year and was able to pay off an entire 2 months of card balances/charges! That was nice.
That is a cool idea! I was thinking of opening an Amazon credit card to do that, but gosh, opening another credit card seems to be less simple.
iris lilies
12-11-24, 12:45pm
But if it is taxable why can't you move it to the same kind of account--so into a Rollover IRA, for example.
Can you create a .rollover IRA if you aren’t working? I guess so.
Tybee when you moved out those funds, did they charge those horrible exit fees? I forget about those because I don’t close down brokerage accounts for the most part. One time I did it immediately after retiring and oh my God they took out a ton of money. Shysters.
We recently moved money from our city Edward Jones brokerage guy to the Hermann Edward Jones brokerage guy because our city guy moved to another company and so we no longer had any ties at all there.
pinkytoe
12-11-24, 12:54pm
There are "rules" about moving from 457B to an IRA. There will be an "exit fee" and apparently the funds were in an annuity so more complication there. I may just cash it out and go on a nice trip to see the ocean again.
I’m going to keep several grand in my big bank savings account. Almost no interest but it’s easily accessible. My emergency fund is a Vanguard Cash Plus account. 3.9% interest, but it’s 1-2 business days to transfer to my big bank checking account.
I know I will never go down to one or two checking accounts and one brokerage account. That is too simple for me, at least at this stage.
But I did empty out one tiny brokerage account and moved the money into a different one. Now I have to actually close the brokerage account itself, just aren't any branches of the bank in this state.
I have big bank checking/savings/credit card. IRA (rollover 401K) and high yield savings with Vanguard. Current job 401K. I closed out my Apple credit card. Didn’t need it.
About 8 years ago, I had to deal with my mother-in-law and father-in-law's estates.
They each had a nightmarish number of accounts all over the place. My mother-in-law had 6 different safe deposit boxes around the country. Making any sense of this, and getting the assets into the hands of the heirs, was quite a job, it took years.
Just a few months ago, I finally tracked down ~$90k that was sitting in an account that was established 20 years ago for a trust for the education of a minor relative. I found the documentation for it when I happened to open a book on my shelf belonging to my father-in-law, and a statement fell out.
So, to "simplify" my financial life, the first thing I did after the estate disaster was to put a list of all of my accounts onto a single piece of paper, and into a single computer file, which my daughter has access to, in case I should get hit by a bus, or Rob decides to put a bullet in my head because I'm guilty of murder for living the rentier lifestyle.
catherine
12-11-24, 2:06pm
Wow, this is such a timely post! Just recently I've been tearing my hair out and saying, "there has to be a better way!" I started looking at YouTube videos on "How to SimplifyYour Finances" and I revisited Dave Ramsey podcasts. I feel like I have too many accounts. Nothing seems simple. I pay some bills from my business account, some bills from my personal checking, some from my joint checking. I'm constantly juggling.
So I'm definitely the one with no suggestions, but definitely one following this thread! happystuff, I love your "credit and forget it" haha!
iris lilies
12-11-24, 3:44pm
Wow, this is such a timely post! Just recently I've been tearing my hair out and saying, "there has to be a better way!" I started looking at YouTube videos on "How to SimplifyYour Finances" and I revisited Dave Ramsey podcasts. I feel like I have too many accounts. Nothing seems simple. I pay some bills from my business account, some bills from my personal checking, some from my joint checking. I'm constantly juggling.
So I'm definitely the one with no suggestions, but definitely one following this thread! happystuff, I love your "credit and forget it" haha!
Start with Narrowing the number of banks you do business with. Maybe you already do this. I think multiple accounts are less of a problem than multiple banks.
I just verified that we have only 2 banks. I am OK with that for the moment.
iris lilies
12-11-24, 3:45pm
About 8 years ago, I had to deal with my mother-in-law and father-in-law's estates.
They each had a nightmarish number of accounts all over the place. My mother-in-law had 6 different safe deposit boxes around the country. Making any sense of this, and getting the assets into the hands of the heirs, was quite a job, it took years.
Just a few months ago, I finally tracked down ~$90k that was sitting in an account that was established 20 years ago for a trust for the education of a minor relative. I found the documentation for it when I happened to open a book on my shelf belonging to my father-in-law, and a statement fell out.
So, to "simplify" my financial life, the first thing I did after the estate disaster was to put a list of all of my accounts onto a single piece of paper, and into a single computer file, which my daughter has access to, in case I should get hit by a bus, or Rob decides to put a bullet in my head because I'm guilty of murder for living the rentier lifestyle.
Geez it is terrible/silly when people fade away with such large amounts of money floating around.
Can you create a .rollover IRA if you aren’t working? I guess so.
Tybee when you moved out those funds, did they charge those horrible exit fees? I forget about those because I don’t close down brokerage accounts for the most part. One time I did it immediately after retiring and oh my God they took out a ton of money. Shysters.
We recently moved money from our city Edward Jones brokerage guy to the Hermann Edward Jones brokerage guy because our city guy moved to another company and so we no longer had any ties at all there.
Yes, you can, according to Investopedia:
There is no age limit for opening an IRA, which means you can open an account even after you retire. Keep in mind that contributions can only come from earned income. You may also choose to transfer or roll funds over from an eligible retirement account you already have.
No horrible exit fees that I found, Pretty straightforward.
There are "rules" about moving from 457B to an IRA. There will be an "exit fee" and apparently the funds were in an annuity so more complication there. I may just cash it out and go on a nice trip to see the ocean again.
I would talk to someone at Fidelity or Schwab to help set it up. No way would I cash it out since you may live a long time and that tax deferred status is great.
So I thought about this and this is my current situation:
Checking/Savings at Big Bank (very little interest)
Savings Account at online bank (better interest)
Various accounts at Vanguard
Two credit cards - one joint and one in DH's name
Maybe move the online savings to Vanguard?
So I thought about this and this is my current situation:
Checking/Savings at Big Bank (very little interest)
Savings Account at online bank (better interest)
Various accounts at Vanguard
Two credit cards - one joint and one in DH's name
Maybe move the online savings to Vanguard?
Check out the Cash Plus account at Vanguard. That’s what I use.
My financial life is way more complicated now than years before. Since before the death of my mom, I've taken over my parents' bill paying, checkbooks and credit cards. I also inherited investment accounts when my cousin died, and my sister's share of those when she recently died. So now I have to track: two savings, two credit cards, three checking, two beneficiary IRAs, my own IRA, a small Roth IRA, three investment accounts, and four CDs.
I've been following YMOYL suggestions for tracking expenses for years. My checking accounts had funds designated for my different expenses and I kept track of each. Now that I've inherited a decent amount, I will be retiring Jan 3rd!!!, and my income will come from the beneficial IRAs that have to be depleted within 6 years. So there's not really a need for a budget like before when money was tighter. The only way to really simplify my personal finances is to just have my quarterly lump sum as my income to cover everything. I'll probably still keep track of what I'm spending (I just enjoy it), but just deduct from that monthly amount instead of designating an amount for each category. Whew! It doesn't seem less complicated, but it should be.
The investment accounts will still be separate, as two are in a Trust. Dad's expenses are still separate from mine too. Thank goodness for financial advisors and accountants.
frugal-one
12-11-24, 10:58pm
Wow, this is such a timely post! Just recently I've been tearing my hair out and saying, "there has to be a better way!" I started looking at YouTube videos on "How to SimplifyYour Finances" and I revisited Dave Ramsey podcasts. I feel like I have too many accounts. Nothing seems simple. I pay some bills from my business account, some bills from my personal checking, some from my joint checking. I'm constantly juggling.
So I'm definitely the one with no suggestions, but definitely one following this thread! happystuff, I love your "credit and forget it" haha!
The credit card I use has the amount earned go back to zero if not used by year end….FYI
frugal-one
12-11-24, 11:01pm
Start with Narrowing the number of banks you do business with. Maybe you already do this. I think multiple accounts are less of a problem than multiple banks.
I just verified that we have only 2 banks. I am OK with that for the moment.
I believe the amount insured By FDIC $250,000 per individual per institution. May need more financial institutions than you would like just to be insured?
frugal-one
12-11-24, 11:05pm
My financial life is way more complicated now than years before. Since before the death of my mom, I've taken over my parents' bill paying, checkbooks and credit cards. I also inherited investment accounts when my cousin died, and my sister's share of those when she recently died. So now I have to track: two savings, two credit cards, three checking, two beneficiary IRAs, my own IRA, a small Roth IRA, three investment accounts, and four CDs.
I've been following YMOYL suggestions for tracking expenses for years. My checking accounts had funds designated for my different expenses and I kept track of each. Now that I've inherited a decent amount, I will be retiring Jan 3rd!!!, and my income will come from the beneficial IRAs that have to be depleted within 6 years. So there's not really a need for a budget like before when money was tighter. The only way to really simplify my personal finances is to just have my quarterly lump sum as my income to cover everything. I'll probably still keep track of what I'm spending (I just enjoy it), but just deduct from that monthly amount instead of designating an amount for each category. Whew! It doesn't seem less complicated, but it should be.
The investment accounts will still be separate, as two are in a Trust. Dad's expenses are still separate from mine too. Thank goodness for financial advisors and accountants.
Having a hard time finding either since we moved. Tried asking others but not impressed with the few we talked or have done business with. Any suggestions on other places to check?
pony mom
12-12-24, 12:29am
I inherited my cousin's financial advisor when I took over his accounts. They've been in business over 40 years, are held to a Fiduciary Standard, and are a Cetera Network representative (if any of that means anything to you). They aren't local to me; I've met him only once and everything is done by phone or mail/email.
I found my accountant by asking a local Farmer's Insurance guy who he recommended. Since I've been a client the business has grown quite a bit. If you have a Next Door Digest online forum, you could join and ask who they recommend. My accountant was just recommended by four posters for someone looking for one.
If you're interested in my financial advisor or want to see his website to compare to others in your area, I can send a private message to you. I'm in NJ. I was told to stay away from the advisors that work through a bank, since they usually only work with particular companies tied to their bank.
I believe the amount insured By FDIC $250,000 per individual per institution. May need more financial institutions than you would like just to be insured?
Right, it's my understanding that if you have a joint account, too, you both will be covered up to a maximum of 500,000 but I would check on that further with your bank.
I've simplfied my financial life recently and in one fell swoop paid off all my medical debts (I was on three different payment plans)! At the beginning of the month when I looked at my IRA and annuity accounts to plug the numbers into my Quicken file, I was marveling at how much the IRA had gained in value as of late. My husband said since I was always moaning about being in debt why don't I withdraw some of those funds and pay off the bills? I didn't know I could do that (mainly because in my mind these accounts seemed untouchable and abstract over the years - I never dreamed I would get to the day where I could actually use the money)!
So I contacted my financial advisor at the credit union where I have all my accounts and he said it was no problem to withdraw a chunk of money to pay off the bills. I had him withdraw $5000 and I used $3000 of it to pay off all my bills. The other $2000 I'm going to use for my share of daily living expenses. He already paid the taxes on it so I don't have to worry about that when we do our 2024 tax return. Basically what I am doing is using some of the profit from those investments to get myself out of debt and it won't really hurt my bottom line. And who knows what is going to happen to IRA's during the next four years? They could lend up losing a lot of that value depending on how the stock market does.
My financial advisor also said that I could start taking payments from my annuity account. This was great news as I am still not working and am waiting to see if I get approved for disability. I feel so much better mentally knowing I am out of medical debt and that I will have a little money coming in each month.
I think the most surprising thing was that this money I had diligently put away since the early '90's seemed so abstract and not "real" to me. I was in my mid-30's and a single parent struggling to make ends meet but I still started the IRA . Even though I could never put the full amount in, I put in what I could. As time went by I was able to put more money in each year and then for the seven years after I moved to New Mexico I was able to put in the full $7500 per year that is allowed. And now that I am 63 there is no penalty to withdraw a chunk here and there as long as the taxes are paid on it. I'm really grateful for my parents and for having grown up in a family that instilled the idea of saving for the future. That, plus the Your Money or Your Life book I read in the early '90's, a Simple Living Support Group I was in back then and this forum is the reason (in spite of being a relatively low-wage worker all my life) I now have these savings. I'm not rich by any means, but I am far better off than many people out there.
iris lilies
12-13-24, 12:50pm
Right, it's my understanding that if you have a joint account, too, you both will be covered up to a maximum of 500,000 but I would check on that further with your bank.
Periodically I asked this question to the bank and we are covered.
iris lilies
12-13-24, 1:13pm
SouzQ that is a great summary of where you are right now financially.
I sorta share some of those concerns. We were rock stars at saving money, fairly disciplined and knowledgeable (but not brilliant) at investing, but we were stooooopid about methods of withdrawing the money and planning for same.
In recent years I have had to pound into my head the tax rules for withdrawing funds. And then, learn and discuss all of the strategies for avoiding tax. And then, just figure out what I want to do with this large amount of money. it is accounted for in our will and trust should I die suddenly, but I’m more interested in disposing of some of it while I’m still alive. I can see the end of my life and I don’t want to pass away with lots of cash laying around.
Iris, do you have a Donor Advised Fund? That's a great way to move the money now and then have the say as to where it gets distributed, now.
Sioux, that sounds like a brilliant thing to do with the IRA!
iris lilies
12-13-24, 2:55pm
Iris, do you have a Donor Advised Fund? That's a great way to move the money now and then have the say as to where it gets distributed, now.
Sioux, that sounds like a brilliant thing to do with the IRA!
No I do not have a Donor Advised Fund.I’m now to the age, as of a few weeks ago, that I can take money out of my IRA and send it to a qualified charity and neither side pays taxes. There’s no reason for a Donor Advised Fund at this point for me or for joint funds I share with DH. I don’t see any advantage of it for me because I feel no need to automate any giving. Every year I decide which organizations I want to give to and how much, and I like that activity. I do not want to automate it.
My DAF is not automated at all. I send it money, then it grows in my DAF (I don't own the money anymore) and then I decide who and what to give the money to. Or it can all accumulate in there. When I die, I currently have it going to my college and another college I support. But I could also keep it going with my daughter=in=law at the helm, since she is like me and likes to give money to good causes. But this way, it's already out of my estate, and it's going to whom I want it to, and as it throws off interest and grows, I make grants to whatever I choose, whenever I choose.
It's not a ton, since I figure I will need money for long term care, God help me.
iris lilies
12-13-24, 6:48pm
I do not want or expect to have any sort of legacy asset after I die (disregarding DH…he will do with my assets what he wishes.) In my ideal world, I die, my assets are distributed, and poof! I am gone as are any lingering financial riches. They they will be distributed to others.
I don’t need a Donor Advised Fund for assets to grow because they are growing in my IRA and in regular brokerages accounts.
JackieLN
12-13-24, 11:32pm
I watch what I spend my money on, do not buy if I cannot afford it thinking it over. A bill comes in the mail, gets paid on the spot sent out the next day. I have watched so many guys get tools and toolboxes repoed because they owed money on them missing payments. These were with the tool truck brands. I told them they should of thought it over first before the purchase was done. I had one tool truck dealer I dealt with, Snap On try to get me buy a new toolbox and I was into it the mechanic business for 2 years at the time. Looked it over and saw I could not afford the payments at the time. Told him no and I was not the only one he did it to. He got reported and lost his franchise over it
I do not want or expect to have any sort of legacy asset after I die (disregarding DH…he will do with my assets what he wishes.) In my ideal world, I die, my assets are distributed, and poof! I am gone as are any lingering financial riches. They they will be distributed to others.
I don’t need a Donor Advised Fund for assets to grow because they are growing in my IRA and in regular brokerages accounts.
That's fine, it sounds like you are happy with your decisions and know that your money will go where you want it to, which is great! I think I started mine partly because the college kept hounding people and this was a way to deal with it, to let them know they would get something later.
It lets me give money away guilt free, not feeling I am taking it from my heirs. I give to things to honor my folks, like Marine Corps charities and libraries, and parks we enjoyed when we were young, things that made them happy, and now things that make my grandchildren happy, like programs they are in, their school PTO, stuff like that. It's not a lot but it's nice to know I can give up to a certain figure and then I have to stop and let it replenish through growth. So I love it, but it's not for everyone!
littlebittybobby
12-14-24, 2:41pm
okay---two things. What IL really needsta do is donate $35k to the non-profit moo-vvveee theater in that littlebittytown waaaaay up north in the middle0o-nowhere. But yeah---they need a new projector, ta keep going. Yup. Or so they say. They'd prolly put a plaque on the wall with your name on it, if you did. Item two: I'd suggest building a nice cozy little 4-drawer mausoleum(see photo) up in that little town, near the old home. You'd have a drawer each for you & DH, and a couple extra drawers ta put ALLLL your mooolah in, so ya can take it with ya. Yup. Ahhh-summm & A-may-zeen. Hope that helps you some. Thankk mee.6138
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