Simplifying one's financial life

[frugal-one]

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]

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]

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]

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.

[Tybee]

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.

[SiouzQ.]

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]

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]

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.

[Tybee]

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]

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.