2017: The Year of Consolidation

It’s tax time! That means it’s time to collect all our tax statements. Is anyone else overwhelmed by the number of documents they have to wait for and collect? Well, I am and I decided to finally do something about it this year. 2017 will be the year of account consolidation.

The Starting Point

In 2016, I had 2 checking accounts, 2 savings accounts, and I also used Digit, Acorns, and Qapital. My taxable brokerage account was with one firm, while my 401(k) rollover IRA and Roth IRA were with another. Way too many accounts to keep track of. While I haven’t written reviews of Digit, Acorns, and Qapital, I’d heard about them from other bloggers and thought I’d give them a try. If you want to know my thoughts on these services, let me know in the comments and I’ll write up a post.

The Process

The first step was closing my accounts with Digit, Acorns, and Qapital. That immediately made my portfolio much cleaner. The next step was to close my second savings account, which was held at a different bank than my main savings and checking accounts. I determined that I don’t need a second savings account by creating a cash flow analysis. I used Excel to determine how much would be added each year and how much I expect to spend. My goal was to have at least 2 years worth of expenses in this account by the end of 2026, in case I “retire” that year. Doing a cash flow analysis had the added benefit of showing that I was putting too much into the savings account, so I changed my automatic brokerage transfers and adjusted my 401(k).

The next step was moving my brokerage account from Betterment to Vanguard, so all my retirement accounts (except my 401(K)) were with one firm. You can read more about my reasons why here. As a side note, Betterment was amazing throughout the transfer. They did a great job of communicating the status. I give them an A+ for their customer service.

I prefer having two separate checking accounts so these are not being consolidated. Let me explain: My main checking is with Wells Fargo. I like the ease of so many ATMs and most of my automatic payments are set up for this account. But Capital One 360 account doesn’t charge FX fees for their debit card and I find their bill pay service much easier to use. This bank account is used for less common expenses — my annual condo insurance, property taxes, etc. so I figure out how much is needed for an entire year and then divide by 26 to set up automatic transfers each payday. The Wells Fargo account pays all my recurring monthly expenses.

The End Point

I now work only with two banks and one investment firm. So much better! I especially like that each account has a specific purpose and I’ve consolidated providers as much as possible. While I’m open to trying new financial services/apps, it’s doubtful that I’ll keep using any long-term.

If you’re curious about credit cards, I have a couple store cards (Target and Kohl’s). Outside of that, I have 3 general credit cards, each with a specific purpose: Recurring charges on one, online purchases on another, and in-person charges on the third. This helps make it clear what the origin of a security breach is, if one were to occur. It also cuts down on the number of cards I have to carry with me.

Do you have accounts scattered across providers? Or do you use a simplistic approach as well?


5 thoughts on “2017: The Year of Consolidation

    1. I agree – there has to be a better way. Since all this information is sent to the IRS anyway, why don’t they just send us a statement showing the refund or amount due? If we disagree we can file a claim at that point.

    1. All my brokerage forms were available after 2/1, with Acorns winning the prize for coming in last (around 3/6). I really wish they had to meet the same 1/31 deadline so I could get my taxes over with sooner.

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