Should We Simplify Our Finance?

Some how I started to feel that we need to make some overhaul of our finance to make it more efficient and easier to manage, though we haven’t reached the point that things are out of hands yet. Partly because that getting a credit card, opening a bank account, and buying a stock are so easy these days (usually takes only a few clicks and several minutes of time), we have accumulated a significant number of accounts over years and the number is likely to get even bigger if we don’t take steps to reduce it now. Then it will become a headache.

I don’t know if anybody else has the same problem as we do, but I am sure we are not unique. Here’s what we have now under our names (most of them are joint accounts except the credit cards).

Bank accounts

I am not a 100% rate-chaser, but I notice a bank that offers significant higher rate with low minimum, I tend to go for it. After all I want to get the most of my money.

• One checking account:
  • Bank of America: Our direct deposit account (used to be Summit Bank, then Fleet Bank, than BoA)
• Five online savings accounts:
  • IGoBanking: My latest and primary savings account
  • HSBC: Mainly for Treasury Direct purchases
  • Emigrant Direct: Almost empty
  • ING Direct: My first and, for a while only, online bank account, but now almost empty
  • Virtual Bank: Almost empty

What I want to get rid of: I am sure I will ever use Virtual Bank again, but for others, I think I will keep them for now in case anyone decides to hike their rates so I can move money around.

Brokerage accounts

I used to have only one brokerage account with Scottrade, but services they offer aren’t that great (no dividend reinvestment for stocks and for once, they don’t even have electronic fund transfer) and their commission isn’t the lowest. Then I opened several accounts with other brokers and each seems to have its own feature.

• Four regular brokerage accounts:
  • Scottrade: Primary broker. I could do all my business with them if they offer free dividend reinvestment
  • Firstrade: For investing stocks that pay dividend
  • ShareBuilder: Opened to get their bonus ($155 in total)
  • QQQDirect: Only for purchasing QQQQ, which charges zero commission
• Two DRIP accounts:
  • One with Computershares
  • One with P&G
• Four retirement accounts:
  • 401(K) account at Fidelity
  • Roth IRA accounts at Scottrade and Vanguard
  • Traditional IRA accounts at Scottrade and Vanguard
• One Treasury account:
  • TreasuryDirect: For investing in I-bonds and T-bills

What I want to get rid of: ShareBuilder can go as I don’t really like the idea of investing on the every Tuesday, plus I don’t trade that much any more. I prefer to trade whenever I feel it’s the right time and with a larger amount instead of $100 or $50 a month with $4 commission.

Mutual fund accounts

All my mutual funds are purchased directly from the fund companies to avoid any unnecessary fees. That means every time I want to invest in a new fund, I have to open an account with the fund company.

• Eight mutual fund accounts: Eleven mutual funds are held at eight mutual fund companies with eight separate accounts.

What I want to get rid of: I have been considering to sell my shares in CGMFX for a while, but didn’t take any action. What I like is its rate of returns (highest YTD return among my mutual funds) and what I hate is its high turover ratio (thus large capital gain distributions).

Credit card accounts

When there’s a new card offer with big incentives ($100+ sign up bonus and 0% APR for balance transfer), I want to have it (two new this year already), even it means I will abandon the card after the initial period if the card doesn’t have any other values. That, however, doesn’t mean I will close the account. In fact, I don’t usual close an account because I have no use of it. On the other hand, the large number of credit cards doesn’t seem to affect my credit score that much.

• One MBNA account: Active
• Two Bank of America accounts: Non-active, one for 0% balance transfer
• Two Discover accounts: Non-active, one for 0% balance transfer
• Three Citi accounts: One active and one for 0% balance transfer
• Three Two American Express accounts: One active
• Four store accounts: Non-active
• Five Chase accounts: Two active

What I want to get rid of: Among the newest accounts (Chase Freedom, Citi PremierPass, and Discover Miles), I can close the Discover Miles card after the 0% balance transfer promotion ends in June. For the other two, I am using Chase Freedom now for the 3% rebates on groceries and gas and will keep Citi PremierPass as a travel card.

Even with the changes I plan to make, we still own a large number of accounts. When I look at them, I feel my life could be a little easier if I cut the number by half (though I haven’t missed any payment so far). The difficult part is to figure out which one to cut. They all seem to have some use, big or small.

What should I do?

*Photo from Purdue.edu

Featured information

Figuring out tax refund can help you plan your finances. But to figure your mortgage loans and to do equity finance you need a pro. If your bank locations you bank at are far you can use online banking to do the trick. Work at home jobs have increased with the support of credit card merchant services. More people are looking for home-based jobs now to make money at home.

Popularity: 49% [?]

If you enjoyed reading this post, please consider subscribing to my full RSS feed (What's RSS feed?). You can also subscribe by email to have daily updates delivered right to your inbox.

• Ready to buy stocks/ETF with zero commission? Check out the Zecco review and try Zecco Trading with these Zecco promotion codes to get 10 free trades/month. Or, use TradeKing as an alternative (TradeKing review and TradeKing promotion codes).
• Seeking higher returns for your cash? Take a look at the latest interest rates from leading online banks and find out where to get the most for your money.
• Earn up to 5% cash back from these cash back credit cards while shopping at gas stations, grocery stores, or online.