Declutter Your Finances

I recently came across a post from a friend about the numerous accounts she manages as an expat across different countries. Living overseas, I faced a similar situation with three bank accounts in Singapore, a couple in the US, and several cards.

By the end of 2022, inspired by another friend's post about decluttering their finances and consolidating into fewer accounts, I took action. During the quieter end-of-year period, I visited various banks to close the accounts I no longer needed. I also made sure to close my other accounts in the US, keeping just one bank account and a credit card open for the sake of maintaining my credit history.

Now, in Singapore, I maintain only one bank account. Though I still have a few credit cards, I'm planning to consolidate them, though I have a few mainly for miles hacking purposes.

Decluttering your finances is crucial to fully understand your assets and liabilities. If you haven't tackled this yet, I'd suggest taking some time in the next month to do so.

You know how there was that Marie Kondo phase, where everyone was trying to declutter their physical things? Do it with your money. It's equally if not more important!

Here are a few steps to consider:

1. Reviewing Bank Accounts: Start by taking a comprehensive inventory of all your bank accounts, both domestic and international. It's easy to accumulate these over the years, especially with various promotions or life changes. Assess each account's purpose, fees, benefits, and usage. If an account is no longer serving a valuable purpose, consider closing it. This not only simplifies your financial landscape but can also reduce unnecessary fees and account management time.
2. Consolidating Assets: Once you've streamlined your bank accounts, the next step is to consolidate your assets. This involves gathering information about your cash reserves, investments, and any other financial assets you might have. The goal is to have a clear, consolidated view of your assets, which can help in making informed financial decisions. Knowing your total cash on hand, for example, can influence your budgeting, savings, and investment strategies.
3. Simplifying Investment Accounts: If you're involved in trading or investing, having multiple securities accounts can complicate tracking and managing your investments. Aim to consolidate these into a single platform if possible. This can help you better monitor your portfolio's performance, reduce fees, and simplify the tax reporting process. Choose a platform that offers a good balance of low fees, useful features, and reliability.
4. Streamlining Retirement Savings: For retirement savings, minimizing the number of accounts can help in focusing your strategy and tracking progress towards your goals. If you have multiple retirement accounts, like pension plans from different employers, consider consolidating them into a single account or two, focusing on those with the best terms and lowest fees. In Singapore, for example, maintaining your CPF account alongside a private endowment plan can offer a balanced approach to retirement savings.
5. Examining Liabilities: Finally, take a thorough look at your liabilities. This includes all forms of debt, from credit cards and personal loans to mortgages. Identify any areas where you might be overpaying on interest or where debt consolidation could offer financial relief. Consolidating multiple high-interest debts into a single, lower-interest loan can reduce monthly payments and the total interest paid over time, making debt management more straightforward and less stressful.

Good luck!