It’s not uncommon to accumulate things over the years, without taking time to straighten them out periodically. That applies to our finances as well as to our possessions.
How many credit cards do you carry? How many stocks and bonds, brokerage accounts, mutual funds, and RRSPs or RRIFs do you own? It’s not just a matter of finding time to keep track of all these different financial assets. Often, these assets are acquired without a clear-cut strategy, so you may own assets with similar investment objectives or that are not compatible with your financial goals.
If you feel it’s time to straighten out your finances, consider these steps:
- Make a list of all your assets and debts. List each one individually, so you have a sense of how many different accounts you’re dealing with.
- Go through each one of your investments. Make sure you understand why you own each one. Are you really adding diversification to your portfolio or do you have overlapping investments? Assess the prospects of each investment and decide whether you should continue to own it.
- Look for ways to consolidate accounts. Try to get down to one bank account, one brokerage account, and one RRSP. This can significantly reduce the time needed to review and reconcile accounts.
- Assess your outstanding debts. Do you really need all those credit cards? Consider keeping only one or two cards, so it’ll be easier to monitor balances. Look for ways to reduce the cost of your borrowing. Is it time to take another look at refinancing your mortgage?
Modified from a post from financial-topics.com. For the original post, click here http://www.financial-topics.com/37020/e_article001557073.cfm?x=bg90W4s,bgjH7Mb7.