Hoarders: Personal Finance Edition

I would like you to try an exercise today. In less than thirty seconds, describe your personal financial situation in detail without looking online or at any statements. It may go something like this:

• One Chase credit card - $ 3,200 balance
• One Citi credit card - $ 434 balance
• One Wells Fargo checking account - $ 3,400 balance
• One Wells Fargo savings account - $ 33,000 balance - .05% interest rate
• One Wells Fargo Mortgage …………etc...
• One Vanguard brokerage account with investments XYZ costing "X" etc.....

You would go on to list every financial account along with it’s balance and corresponding interest rate. This is an exercise that very few people can pull off, and yet I recommend that my clients attempt this. Why? It will bring CLARITY and SIMPLICITY to your financial picture by forcing you to see how complex your current financial world is.

The more balls someone is forced to juggle the more likely they are to make a mistake. The same principle is true in personal finance. As your investments, debts, and accounts increase in complexity and number, it is difficult to manage them all well. Mistakes occur. Bills do not get paid on time, credit cards become delinquent and investment costs eat your lunch.

Unfortunately, most financial institutions are trying to get you to open as many accounts as possible. They are in the sales business and the product they are pushing is money, therefore, a large number of financial products will be pitched to you.

I was speaking with a nice lady who had thirteen credit cards and yet she was still receiving multiple credit card offers from banks. They wanted her to open her fourteenth!! I was pretty mad at the institutions for doing this as they were able to see her credit report and determine how many products she already owned. When I attempted to convince her to cancel them, every card had a story. I could not convince her. Do not be a hoarder of financial products as ruin awaits you if you do. Believe it or not, you can survive with one credit card and one bank account. Maybe no credit card. Try it. You can always add more if it's too hard :)

Avoid financial advice from anyone who receives compensation based on your activity. Work with an objective, transparent adviser who is aligned with your interests and needs. Someone who will charge you by the hour. This guy seems pretty good. He is a coach, counselor and educator first, seeking to invest in his clients so they can invest for themselves.

Robert Hunt Financial, LLC will occasionally engage in shameless self promotion. The last paragraph of this article is one such instance. Many more will certainly follow.