PROJECT: Account consolidation (part 1 - the road to sanity)

One of the most useful things I’ve done in my effort to get my finances more organized is to break down what started as a big project into several smaller projects. So instead of a massive, unwieldy to-do list that covers everything I want to work on, I track the projects I want to do and then map out the milestones and tasks for each project as I work on it. Thinking about the smaller projects individually feels much more manageable and once I complete a project, I call it a win and it motivates me to go tackle something else.

Recently I started tracking project milestones on a giant calendar I posted in my kitchen. Back when I led consulting projects at IDEO, we did this all the time and it was so helpful to see important meetings and deadlines at a glance. This paper calendar is intended as a complement to the digital stuff I maintain, a Google calendar and an Asana task list. It gives me a high level view of the progress I’m making and helps me integrate these projects with other things I have going on in other parts of my life. I was reminded of this great way to plan by a post about creative calendaring I read recently.

The project I’m working on right now is consolidating my accounts so I can be more intentional about how I manage across my assets and liabilities - checking accounts, investment accounts, loans, etc. Looking back, it seems totally reasonable that I ended up with account proliferation. I’ve worked for a few different employers and they’ve all used different companies to manage their retirement plans. There was never a good time to figure out what to do with my old 401(k)s. When I was trying to ramp up on the new job I was far too busy to think about it, and by the time I had my head above water, it was easier to just live with the status quo and do nothing. And retirement accounts are just the beginning. I have a few different student loans at different rates with different providers, a 529 account I just started for my kids...the list goes on.

I think it creates mental fatigue if you have a lot of accounts to track. I do like sites like Personal Capital that allow you to aggregate accounts into one view. It’s a good start, but I’d still prefer to have fewer accounts to aggregate into that view. It will mean less time spent keeping track of things like login IDs, passwords, account statements, and tax documents, and more time spent being strategic about how those accounts fit into my larger financial picture. I’d much rather spend time making sure I have the right types of accounts and scrutinizing the fees and interest rates I’m paying to hold those accounts. To put a finer point on this, I have had a Fidelity account with $0.33 for almost 10 years, leftover from some stock I sold when I worked for Yahoo! Any emails or statements I get from them are just noise -- a total waste of time and resources. I don't want that account as a line item on anything I have to look at, taking up space and distracting me from thinking about more important things. 

So here’s the outcome I’m hoping for with this current project...

Fewer accounts    >>    Less mental energy expended keeping track of what is where    >>    More energy spent being strategic about how those accounts fit into my larger financial bigger picture

...and here’s my checklist for get it done:

1/ Make a reference list of all accounts with their associated login IDs and passwords.

For me this step has so far included sitting on hold with customer service a few times to unlock accounts because I’d tried guessing at old passwords too many times. I have to say that dealing with customer service in the middle of a busy day is enough of a barrier that it’s probably part of the reason I haven’t done this sooner.

2/ Write down the plan of action for each account (hold it, roll it over, etc.)

I also included the account type (e.g., Traditional IRA, taxable investment account) and account balance on this list so I could look at the list with my husband and have a conversation about what the plan for each should be.

3/ Figure out where to consolidate accounts.

In my next post, I’ll do an in-depth assessment of different places that I’m considering consolidating investments. For now, I’m not going to get into consolidating debt.

4/ Systematically work through the list until consolidation is complete.

This project has already taken me a couple of weeks because it has to fit in with all of the other things I have going on. I’m finding that being really systematic about it, just focusing on getting to the next step and hitting the next milestone, has been a helpful way to continue making progress.

5/ High fives all around...

...or not. I think that’s actually part of the problem with personal finance projects like this. There’s not a super sexy outcome that you can tell your family and friends about. And the potential rewards are pretty long term so the benefit doesn’t feel all that tangible. I cannot picture myself saying ‘Woo hoo everybody, I just consolidated a bunch of investment accounts into fewer investment accounts so I can have better visibility into my finances and make better financial decisions in the future!’ I can just hear the crickets I'd get with a choice line like that already. So anyways, I’m open to any and all suggestions for a suitable way celebrate getting this done.

Check back soon (or subscribe) to see the in-depth research I'm doing on the best places to consolidate my investments.