Before you can make real and lasting progress on your financial goals, you need to organize your finances. Here are a few more steps to help better organize your financial life.
Organize Account Clutter
Do you know where all of your money is? If you have multiple accounts with the same titling, it can become difficult to get a complete view of your overall allocation and track your investment performance. For example, let's say you have several retirement accounts - such as IRAs and a 401(k) account in a prior employers plan. If this is the case, then consider consolidating these accounts into one rollover IRA. The benefit of doing this is that one account will be easier to monitor and manage. Doing this will also make it easier to keep your beneficiary designations up-to-date.
Organize Credit Clutter
Do you really need all of those credit card accounts? Although there may have been a reason in the past for having each credit card, if that reason is no longer valid, then the account should be closed. Too many accounts that go unmonitored can be prime targets for ID thieves, who can hijack the account information and use it to perpetrate fraud using your information.
The way to approach this goal is to get a copy of your credit report which lists all of your accounts. Credit reports from all three credit bureaus can be accessed for free at annualcreditreport.com. Then contact the companies of the accounts you want to close and ask them to note, "Closed per account holder's request." on your credit report. Be aware that closing credit accounts where there is a long history of on-time payments and a large amount of available but unused credit may have a negative effect on your credit score. But closing recently opened department store cards, with low limits should have little or no effect.