There are so many aspects to managing your personal finances that it can sometimes be a challenge keeping everything together. In order to realize financial security in your life you must be able to juggle several tasks simultaneously. You will have to know how to make money, save money, invest money and pay bills on a regular basis to ensure all of your financial goals can be reached. With so many balls in the air at the same time, many people find it beneficial to consolidate their accounts to keep all of their finances in order. Here we look at how you can consolidate your financial accounts and the benefits that can be realized by doing so.
Benefits of consolidating financial accounts
Consolidating bank accounts
It is not uncommon for individuals to have several accounts at different banks. This could be due to several factors. For example, you might use a bank with a convenient location for day-to-day transactions, or you might use an online savings account for lower fees and higher interest rates. The problem with having your money spread all around is the difficulty in keeping track of your finances. Managing multiple accounts increases the likelihood of making mistakes or noticing errors that could end up costing you more money in the long run.
By consolidating your bank accounts into one bank you can often save money across the board with reduced fees or other rewards such as favorable terms and interest rates as a result of having multiple accounts with one bank. When you keep all of your accounts in one place you can receive consolidated statements which make it easier to see all of your finances in one easy place as well as providing convenient documentation that may be needed for tax season.
Consolidating investment accounts
When you have your investments spread out and managed by different brokerage firms or mutual fund companies, it is often difficult to know exactly what is going on with your money. Consolidating investment accounts with one firm can offer the following benefits.
- Keep track of investments. When all of your accounts are managed and located at the same place it is more convenient to track your assets. You can see in one place how your investments are performing.
- Keep track of changes. Fees, commissions and policies are subject to change with each company. These changes can be hard to follow if you have your accounts spread out, however by having your accounts in one place you can easily keep track of changes that can impact your money.
- Special perks. The bigger your account, the bigger the perks you may receive. Some companies will reward bigger account holders with free services or reduced fees and commissions.
Making an informed decision.
There are many benefits associated with consolidated financial accounts, however this step may not be right for everyone. It is important to consider both the advantages and disadvantages of any moves you make in regards to your personal finances. What works for one situation may not work for another making it all the more important to make an informed decision.