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I THINK SERIES I savings bonds are a great place to stash money you’ll need to spend in five or six years, and yet I’ve resisted buying. I’ve seen credit cards that offer more cash back than the cards I currently carry, but I haven’t taken the bait. The reason: My goal is to have fewer financial accounts, not more, even if it means fewer dollars in my pocket.
As I discussed in an article earlier this year, I’ve unloaded the jumble of investments in my three Roth accounts—which I plan to bequeath to my kids—and consolidated everything in a single fund, Vanguard Total World Stock Index Fund. That’s had an immediate payoff: Amid this year’s market turmoil, I haven’t bothered checking the performance or even looking at the account values.
Since then, I’ve closed a checking account and a credit card, leaving me with three credit cards and two checking accounts—one personal, one business. I’ll likely ditch one of the three credit cards, leaving me with two. I’ll use one for everyday spending and keep the other as a backup, in case I lose my primary card or it gets hacked.
Next on my to-do list: cutting back the rewards programs that I use. Thanks to decades of business travel, I’m signed up for four frequent-flier programs and three hotel programs, plus I collect Amtrak rewards points. My goal is to use the points I’ve accumulated in most of these accounts and thereafter focus my spending on one hotel and one airline, in part so I don’t have to worry about keeping the other accounts alive by occasionally earning points.
The fact is, the more accounts we have and the more investments we own, the more precious time we have to lavish on them, and I can think of so many better ways to spend my time. Similar to donating or throwing away old possessions, I find it liberating to relinquish these various accounts, and I suspect my executor will also be grateful—though I’m hoping to delay that moment of gratitude for as long as possible.
I usually agree with everything that Jonathan says, but not with the rewards programs, especially the frequent-flier programs. Not that I covet the points – far from it. I see no value in them at all. So, I will always go with the cheapest fare (plus a combination of convenience and “do I have status with the airline this year that justifies the extra $20”). For smaller flights, I will gladly fly coach, and forgo the lounge. It is only for the longer international flights would I consider upgrading – all I need is a lie-flat bed, and every other consideration is secondary. The money saved (often in thousands of dollars) is much more than the benefits of loyalty to a specific airline. Google Flights is my only friend in these matters.
I’m so with you on this, Jonathan. When my husband died quite suddenly two years ago, I knew where all our assets were stashed, but I counted 27 different “buckets”: credit cards, IRA’s, checking accounts, investment accounts, etc. I spent a lot of time consolidating to make it easier for myself and, as you mention, for my eventual heirs to distribute. Like my husband did for me, I’ve created an updated “cheat sheet” for them, with a separate list of my passwords – this last on the advice of a book titled something like “What to do in case you get hit by a bus”.
I agree with the principle of simplification but have taken a different tactical approach than those discussed. First, my wife and I hired a financial advisor. Paying a trusted professional who specializes in retirement planning to not only provide holistic planning advice and manage investments seemed like a good way for us to accomplish many things including spending more time