Assessing the Progress toward Financial Simplification
Back in April, after reviewing our financial structure, I came to the conclusion that our system was way to complex due to the large number of accounts we own, though I managed to make the system work quite smoothly for us.
Now nearly five months have passed since I decided to simplify our finance to make it more efficient. Did I make any progress? The answer is, disappointingly, not quite. Though I have twisted things a little bit here and there, I guess I actually increased the number of accounts under our names instead of shrinking it. Here’s where we stand now.
Online bank accounts: Then 5, now 4
This is probably the only area that I actually worked to meet my goal: I closed two bank accounts (Virtual Bank and Emigrant Direct) that I don’t think I will ever use again. However, a new bank account (FNBO Direct) was opened in May.
Brokerage accounts: Then 4, now 5
Credit card accounts: Then 20, now 19
OK, so the total number of credit cards did come down a little bit. However, 19 is still a large number that could use some reductions.
What needs to be done
Though very limited progress has been made so far, I still want to have a smaller system to make managing all the accounts easier to do. Right now, the easiest target is the online bank accounts, which can be reduced to 3. At the end of this month, FNBO Direct will end its 6.0% APY promotion and I may consider close the account depending on the rate. For the brokerage accounts, since each account has its own purpose, I am not so sure which one should be eliminated. The only possible choice is Firstrade, which doesn’t really have special features except that it serves as an alternative to Scottrade for dividend paying stocks/ETFs investments. Since I don’t use that account very often, it doesn’t hurt too much to pay $6.95 per trade. For credit cards, I already have a couple accounts in my mind that I can get ride of after the 0% balance transfer is over in November. For example, I don’t think I will ever use Chase Sony card, Flexible card, and Discover Miles card.
Even after the planed reduction, the total number of accounts we have won’t be significantly lower. From what happened in the past five months, I kind of keep my expectation low. It’s quite easy to get a new account when it has some uses even temporarily. Closing it, however, doesn’t seem to be always urgent. Thus the accumulation of accounts. Now I only hope it won’t get blew up again.
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