Consolidate your accounts in 5 steps and make finances simpler.

How many financial accounts do you have? Savings, checking, investment, and retirement accounts. I bet you have at least 5, but why so many? I'm sure every account you have doesn't have a purpose too. Having 3 savings accounts probably isn't much different than having just 2 or 1, so why keep them? I don't think you should. 

An enormous part of personal finances is the psychological side and that's important to understand. Consolidating down to just the accounts that have a purpose will be a psychological action that will improve your finances. Consolidating down to just the accounts you need might not put you in a better position financially, but it will help your finances be less overwhelming and easier to manage. Of course, these outcomes may lead to financial gain, but that's not the point. We want our psychological side of our personal finances to improve. 

Follow these steps to consolidating your accounts
There are two ways you can consolidate. First, you can consolidate down to have less accounts (e.g. having 1 checking account, instead of two). Second, you can consolidate down to one platform (e.g. having a savings account and an investment account at the same bank, instead of at different banks). For you, it will be a combination. The goal isn't to consolidate down to one account. The goal also isn't to get all your accounts on the same platform. The goal is to simplify your finances. 

1. List all your checking, savings, investment, and retirement accounts. List the platform for each (e.g. Wells Fargo, E Trade, Bank of America, etc.).
2. For each account, write the purpose for it. If you can't come up with one, that's okay, just leave it blank!
3. Consolidate! Look at your account list from number 1 and figure out where you could consolidate down to 1 platform. Look at your account list from number 2 and figure out accounts that don't serve a purpose anymore.
4. Perform your plan! Now that you know how you want to consolidate, execute your plan. Call banks, close accounts, open accounts, or do whatever you need to do. It may be overwhelming in the process, but if you stick with it, it'll have a great benefit.
5. Improve your purpose. For each account, now consider another option. See if there's a better product out there that would serve your purpose better. If you're savings at a 1% interest rate, maybe there's a savings account that could offer you a 2% interest rate. This is where you actually start making a financial gain and not just a psychological. 

My consolidation
Below you'll find my consolidation as an example. I haven't completed the entire process yet, but I'm working on it now. I wanted to share it to help you understand how to consolidate your own finances.

1. List of accounts and their platforms

• Checking 1 - Wells Fargo
• Checking 2 - Wells Fargo
• Savings 1 - Wells Fargo
• Savings 2 - Wells Fargo
• Credit 1 - Wells Fargo
• Credit 2 - Amazon (Synchrony Bank)
• Individual Brokerage Account 1 - Wells Fargo
• Individual Brokerage Account 2 - Acorns

• Roth IRA - Wells Fargo

• Roth 401k - Fidelity
• 401k - Vanguard

2. For each account, write the purpose for it. Okay to leave blank.

• Checking 1 - Main checking...accessible via ATM in most cities
• Checking 2 - Old checking
• Savings 1 - Main Savings
• Savings 2 - Emergency Fund
• Credit 1 - Main credit card, barely used 
• Credit 2 - Amazon credit card, used often
• Individual Brokerage Account - Regular investing
• Individual Brokerage Account 2 - Was used for saving for my wife's engagement ring

• Roth IRA - Retirement Account

• Roth 401k - Current employer retirement plan
• 401k - Old employer retirement plan.

3, 4, and 5. Consolidate, Perform, Improve.

• Checking - Wells Fargo - Main checking....accessible via ATM/Bank in most cities
• Savings - Betterment - Main savings. 2.68% interest rate
• Credit 1 - TBD - Main credit card with a good cash-back program
• Credit 2 - Amazon (Synchrony Bank) - 5% off all Amazon purchases
• Individual Brokerage Account1 - Webull - Individual brokerage account with no trades. My first choice was Robinhood, but it didn't work for me. 
• Individual Brokerage Account 2 - Fidelity -  Emergency Fund, invested in low-risk mutual funds to keep up with inflation.
• Roth IRA - Fidelity - Personal retirement account
• Roth 401k - Fidelity - Current employer retirement account (rolled old employer 401k into this).

In steps 3, 4, and 5, you can see I consolidated to what I needed and then changed some of the accounts to get the maximum benefit for the purpose I have. For example, switching from Wells Fargo Savings to Betterment increased my yearly interest from <.01% to 2.68%, which is pretty close to inflation. I switched my individual brokerage account from Wells Fargo (who had a trade fee) to a company that doesn't have trade fees. Then finally, I consolidated my retirement accounts onto one platform, Fidelity. Then, I closed accounts I just don't use anymore, like my old checking account and Acorns. They served a purpose at one time, but they don't anymore.

I consolidated down from 11 different accounts to 8. My platform count (5) stayed the same, but I improved many of my accounts by changing platforms, whether they offer lower fees or higher interest rates. Overall, it's less overwhelming, easier to manage, and more financially beneficial.

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Your plan will probably look totally different then mine. The important part is that you choose a consolidation plan that fits your finances the best. Determining the best plan for your consolidation might be hard, so please reach out to me. I'll help for free. 

I do have one announcement. We're starting to create social media accounts for Better Budget. The first is @BetterBudgetCo on Instagram, so please follow! More social media accounts to come. I hope you enjoyed reading Better Budget and that it helped improve your personal finances!