New Year’s Resolution: Declutter Your Finances in 3 Easy Steps

Bottom Up Budgeting
Know Your Numbers
October 8, 2020

New Year’s Resolution: Declutter Your Finances in 3 Easy Steps

Declutter Your Finances

Ah, 2021 – I’m pretty sure a new year has never been more anticipated in my lifetime! And with so many of us still spending vast amounts of time in our homes, the “work on YOU” types of resolutions have pretty good odds of being accomplished πŸ™‚

Now, I find goals related to my finances to be pretty easy to work towards and usually achieve…maybe because I have a thing for money? I am, after all, astrologically inclined towards being good with it …not that I live and die by the zodiac and horoscopes and such, but you can’t help knowing about these things, and ‘good with money’ is a Taurean trait that resonates well with me; ‘materialistic’ though, not so much.

How Do You Declutter Your Finances?

At this point you’ve probably just finished decluttering from Christmas – decorations back in storage, gift wrapping recycled, furniture in its usual place, fruit cake offloaded onto that one strange person you know who actually likes it. Things are feeling fresh around the house now, aren’t they?

So how about all those accounts and cards you have? It isn’t very time-consuming to get all that in order as well. Now, decluttering usually means reducing, but I feel that when it comes to your money, it’s more about making your set-up and systems work better. For the most part that will mean streamlining, yes, but I’m not a hard-ass about minimalism. How you set things up is all about what works for YOU. So…think about what isn’t working for you, and get to it! Let’s start things off with…

Too Many Bank Accounts? Or Not Enough?

Running one checking and one savings account works, but is that ideal when you have more than one income source? Certain things, like your tax obligation or profitability, are easier to assess at a glance with different accounts. As a Gig Boss, you might find it a lot easier for tax record purposes to keep a separate account for your gig income-expense data. If you have more than one gig (which I highly recommend if you don’t have W2 job), you might want to have one per gig so you can easily determine which ones are working best for you.

I just reduced from 6 savings accounts to 4 – Emergency Fund, Niece/Nephew Education, Spavings (a fun challenge I might run with you, if interested!) and House Repairs. I feel like those things need to be separated because the goals are different. Could I do it with one account? Sure. But I really like seeing how each grows according to their own plan of action.

But Gig Boss Katie, where’s your vacation fund? Isn’t that your favorite spendy thing??
That’s a whole ‘nother blog post. Seriously. The short answer is that I have 350,000 points/miles worth $5500+ towards flights, hotels, etc. and $585 in vouchers for cancelled flights. AND I rescheduled a cruise for 2022 that is 70% paid up. No need to worry about that for a while!

Decluttering Loyalty Accounts

Speaking of air miles, by relocating to a very convenient but small regional airport, I lost access to one airline completely, and I only had a few thousand miles with them anyway. So as part of my decluttering of accounts, I found JetBlue’s donation program and gave 6100 miles to the American Red Cross. So if you have miles/points anywhere that are about to expire or you earn so seldom that it’s pointless (heh) to maintain them, look into their donation program.

It also made me think…what other loyalty programs are more of a burden than a benefit? I went on an Unsubscribe spree in my inbox, for starters. Hmm…not really into the Best Buy program, simply because I don’t shop there often. Good-bye, Winn-Dixie, I’m no longer in your region at all. Southwest…welllll…I’m a big fan of that airline and I think they use an airport about an hour away, which might be worth it sometimes. And 14K points are a good amount…so Southwest stays. You get the idea πŸ™‚

Credit Cards: To Cull or Not To Cull

If you are not good at paying off your credit cards and monitoring your spending, absolutely go minimal on this – one for personal use, one for your gig expenses. Pick cards with no annual fee and good cashback bonuses, eg. the Citibank Double Cash or Chase Freedom Unlimited. Also, you don’t need an official business credit card product for your business expenses – they nearly all have an annual fee. A different personal card with no fee does the trick nicely.

Now, I love working credit card rewards, it’s a hobby of mine and isn’t for everyone. So my wallet holds 6 personal, 2 business and 2 store cards. I honestly hate having this many cards, but they’ve all earned their slot. So pull out your wallet – literally! – and dump all your cards out. It’s time to see what’s worth keeping.

  • Do you get a good benefit from it that you use frequently, e.g. free checked bag for an airline card, bonus cash back on something you buy a lot of?
  • Is it your oldest card and you want to keep it to extend your average account length on your credit report? (Sidenote: I don’t worry about this)
  • Can you even remember the last time you used it?
  • Does it have an annual fee?

This week I’m going to get rid of one of my two business cards because the $95 annual fee is due and I really just need one card. I’m also going to call about my United Airlines MileagePlus credit card because it’s up for the $95 annual fee this month and I don’t see me getting any benefit from it in 2021. I wish I’d cancelled it last year…2020 hindsight! (Bad pun totally intended).

Another bit of credit card housekeeping you might want to do: check the limits on all your cards. I don’t see the point of having a $15,000 limit on an airline credit card that you only use for the occasional $400 ticket, while your everyday cashback spending card is only $2000. You don’t even have to call to make this happen – most banks will do it through their secure messaging system.

Bask In The Feeling of Accomplishment

You did make a resolution or two about money stuff, right? Well if “get my finances in order” was on that list, you can check it off! And it took all of what, 30-60 minutes? Good, because there’s nothing like feeling in control of something when you’re facing another unpredictable year.

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