Steps to Simplify Your Finances

Wednesday, December 14, 2016 |

Clutter is the enemy of a strong financial plan. The more complicated your financial affairs are, the harder it is to figure out where you are and where you’re going, be flexible, make important decisions (paralysis by analysis), and put yourself on a path to reach your long-term financial goals. Simplifying your finances (and everything else in life) allows you to focus on the more important things. Some ideas on how to get started:

  • Take inventory. See what you have, where it’s at and what’s worth. Many of our new clients come in and aren’t sure. 
  • Minimize everything. Your accounts, investment advisors, portfolio holdings, credit cards, etc. The more clutter you have, the harder it is to make a decision moving forward. With regard to investments, you can still adequately diversify* with minimal holdings. 
  • Manage everything from a holistic standpoint. That way one decision doesn’t derail another. For example, investing in a private equity deal might makes sense as a standalone investment, but might be too risky for your financial plan if the investment is too high relative to your net worth.   
  • Try and have a similar top down allocation in your retirement accounts and taxable accounts, that way your long-term risk-return profile stays consistent. 
  • Eliminate > Automate > Delegate. Eliminate is what I alluded to when I mentioned minimizing. Automate would be bill pay, portfolio rebalancing, etc. 
  •  Delegate would be to an advisor who will give you updates, but so you don’t have to be involved in the day to day. Get a quarterback. We are the financial QB for our clients, so when they have a question about anything regarding finances/accounting/estate they come to us and we get them the answer. 


*Diversification does not guarantee a profit, or protect against a loss.

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