Over the last few weeks, I’ve frequently written on and mentioned simplicity and a straightforward account structure as great ideas if you’re looking to reduce money headaches. One example was holding your savings within an investment account.
Intuitively, we know that purging, consolidating, and deleting are sound organizational principles. But sometimes, we just can’t bring ourselves to spend an hour on the phone with a rep that will try to do everything to retain you.
Let me motivate you. You will love that hour ‘chat’ like nothing else in the world if you keep these five benefits of account consolidation in mind.
1. Simplicity
That feeling in the back of your head that you’re forgetting something is not your brain playing tricks. It’s all those ‘open loops’ you haven’t closed out yet.
You will enjoy getting one statement in the mail instead of six. Taxes will be a breeze when you don’t have to add and enter dividends and gains from a mind-boggling stack of paperwork.
You’ll generally have less to worry about and only one place to look if something’s missing or needs to be retrieved.
2. Easy to Track
With one account (per type) to log into, how hard can it be to stay on budget, right? You’ll enjoy having one place to see all of your transactions – whether it’s a checking account, investment account, whatever…
You get bonus points if you find a bank/brokerage where you can have your entire financial life at one institution. Now that is the ultimate in simplicity!
3. Reduced Fees
Inactivity fees? Forget about it! You’ll actually be using all of the accounts you own. Overdraft fees because you used the wrong check or card? No way! All your money is in one place.
I recently had a yearly subscription renew on a credit card I haven’t used in 8 months. If I didn’t bother to look at the statement, that’s a big-time cha-ching for the credit card company, and an ouch for my credit report.
4. Guard Against Identity Theft
Having everything in one place keeps you informed and alert, and you should know immediately if something is amiss. On the other hand, that checking account I haven’t looked at in a year is a prime target for some mischief.
There’s a case to be made for having two accounts in case one gets compromised. I don’t buy it. Your finances will be a mess for a few days anyway – you might as well deal with one institution instead of making it worse with two.
5. Increased Control
Ahh. A place for everything and everything in its place. You’ll feel like the king of the world.
Suddenly, your asset allocation time will no longer be an exercise in addition, just percentages. You won’t have to track three interest rates on savings accounts, and figure out which one you should move money to next. Your checking cash flow will be crystal clear and plain to see.
Why Wouldn’t You Want to Consolidate?
Because it takes effort and you don’t want to get up from the couch! That’s why.
Set aside two hours on a quiet Saturday morning, get everything together, and start making phone calls. If you’re diligent from this point forward, you’ll never-ever have to do it again. Promise.
Photo by Horia Varlan
Fiscal Fizzle 
Great article. Everyone has at least one or two accounts they can consolidate. Consolidation saves you time and money. If you consolidate your accounts its also one less account statement you have to receive monthly and one less piece of mail you need to keep track of and open.
Good point, and that in itself is also a good deterrent to identity theft!