How do you manage your money without getting stressed out with a million accounts? When we talked about automatic investments a few weeks ago, some readers noted that having too many accounts was stressful to them. So let’s talk about some easier ways to manage the money, how to get a bird’s eye view of your holdings, and some tips to make your general financial life easier.
First: I hear the stress! My husband and I currently have:
- Two checking accounts (personal and business)
- Three savings accounts (personal, business, and online-only long-term savings with Capital One, our emergency fund)
- A money market fund at Schwab
- Investment accounts at Schwab (from my single days) as well as at Vanguard
- FOUR retirement accounts managed at Fidelity, ING, American Funds, and Vanguard: my old rollover IRA from my law firm days, my 401K from my non-profit days, my husband’s 401K, and my SEP-IRA now that I’m self-employed
- A leeetle bit of money in treasury bonds (through Treasury.gov)
- My son’s 529 account (through Vanguard)
On the debt side:
- Three credit cards (two personal, one business, all through Visa/Chase). (In theory, I have lots of store-specific cards as well — Macy’s, BR, etc — but I never use those unless there’s some big savings to be had.)
- Mortgage (managed through Wells Fargo).
- One final student loan for my husband (2.5% interest) (managed through Sallie Mae). (We paid off everything that was higher than the interest on our mortgage payment.)
- Get a bird’s eye view of things. I manage everything through Mint, but I also have Quicken (which I’ve been too lazy to set up) and, years ago, I used Microsoft Money. I highly recommend you use *something* to give you a “bird’s eye view” of things, whether it’s just an Excel spreadsheet or more. I think Mint is easiest, but I know some people are uncomfortable putting their information (account numbers, passwords, etc) in the cloud. I’ve read enough about Mint’s security to believe that my money (i.e., the thing behind all the passwords and info) is secure, but I’m the first to admit that it’s a leap of faith.)
- If you have duplicate accounts (e.g. for me, the two personal credit cards or the multiple savings accounts), have a reason for it. For example: we use my husband’s old credit card for very limited, usually automatic payments that we want to keep track of — right now we use it for Seamless Web, Zipcar, and Fresh Direct. It helps to focus our attention on those expenses every month, and if anything is unusual or egregious we take a closer look. Similarly, one might say we have too many personal savings accounts right now — one at Chase, one at Capital One, and the money market fund at Schwab. But: Chase is easy access, but at a very low interest rate, so we only keep a small amount in there. Similarly, the Schwab money market fund has very low interest, so we only keep a small amount in case we want to make any sudden investments in the stock market. (About five years ago I used the Schwab money market fund as my emergency fund because it had 5-7% interest — but those days are long gone.) Interest rates are still lousy right now, but Capital One offered a decent amount a while ago so we decided to use it as our emergency fund. (I don’t think it’s the highest interest rate you can get any more, but it’s not so low that it’s worth it to change.)
- Limit what you’re logging into. Another way to simplify your task to manage the accounts is to be able to see as much of it as possible from one log-on. I have the majority of my checking/savings/credit cards with Chase, and I can see a lot of the information (and move money around) very easily with one log-on. I can move money into or out of our emergency fund with Capital One through the Chase logons as well.
- Know when things are due. Mint tells you when your payments are due, but it doesn’t seem to notice if you’ve already paid the bill, so I use “Remember the Milk” to remind me of the monthly due dates for our three credit cards, and as soon as I pay the bill in full I check it as “done.” Even though the student loan payments are automatic deductions, I have that as a repeating reminder in RTM as well — then when I see that it’s posted I check it off. This is a big reason I like to put all of my charges on my own Visa card rather than store-specific cards — I know when it’s due, and I can see it all in one place.
- Know what’s off your radar. For example, Mint can’t track the value of treasury bonds any more. So I have no idea how much they’re worth right now. It’s enough for me to see the line item in Mint that says it was worth $X a million days ago, but I know that it’s off my radar. Similarly: I find Mint to be kind of useless for tracking individual investments like stocks and mutual funds. I don’t know if it’s a glitch unique to me, but the big “investment” chart in Mint shows the same stock on different lines, for different prices, and it doesn’t remove stocks that I’ve sold. So I keep an eye on the big picture (what the total account is worth) and only check how individual stocks and funds are doing about twice a year. I definitely need to go into my various investment accounts and do some pruning — figure out my percentages, re-balance, maybe sell some under performers — but that will have to wait for another day. (And yes, I’ll write about it when I do it — if anyone has any tips on balancing your various portfolios for the first time, I’d love to hear ‘em.)
Readers, do you juggle a million different accounts? How do you keep track of everything? What ways have you found to reduce the stress of managing your own money?