Organizing Your Finances: Getting Rid Of Financial Clutter

by Vinaya HS on July 12, 2010

in Finance

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Each Monday morning, I plan to post my thoughts on Organizing Your Finances. Through this series, I hope to share a tip or two that address a common problem that many of us face in our daily lives — that of organizing our finances. I’d love to hear your thoughts on this initiative and would love it more if you could share a tip of your own. And, as always, do spread the word if you find this useful.

Over the past year, we’ve managed to get rid of a significant amount of physical clutter that was lying all around our home. You name it and I’d bet that I had it — somewhere. Minimalism has made our home simpler to manage.

Driving to work, I felt that the same principles could directly be applied to one’s personal finances as well since most of us do have a lot of financial clutter in the form of unused bank accounts, investments we’ve no idea why we invested in, multiple credit cards, etc. Financial clutter tends to distract us from achieving our financial goals and causes much stress.

I’ve had a lot of financial clutter too in the form of old salary accounts that weren’t closed (and then stressing myself out to meet minimum balances in each of those accounts), an endowment life insurance policy that I bought out of personal obligation (and then stopped paying the premiums), a personal credit card from American Express (that came with the corporate one and that I recklessly charged), and such.

I’ve managed to rid myself of most of these. It’s honestly liberating when you get rid of your financial clutter. I now choose each item in my personal finances with due diligence. That said, here’s an acid test that you should subject each financial instrument that you have to.

Each financial instrument that you have as part of your personal finances should financially — not emotionally or otherwise — justify its existence. If it doesn’t, get rid of it.

Do this and I guarantee financial simplicity and peace of mind.

What do you think? How do you get rid of your financial clutter?




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 6 comments… read them below or add one }

Ashutosh July 12, 2010 at 3:49 PM

Hi Vinaya,

Great to know that you have cleared the clutter. For the last few months even I am trying to do so. Hope to share the good news of some success with you in the next 1-2 months.

-Ashutosh

Vinaya H S July 12, 2010 at 3:51 PM

Are there any specific steps that you’re taking to get rid of your financial clutter?

Ajay July 12, 2010 at 3:55 PM

I am getting rid of my mutual fund clutter… They promised us the stars and then did give a damn about the money we invested :). So last week and this week I am cutting down on the Mutual Fund numbers and reorganizing my protfolio

Vinaya H S July 12, 2010 at 3:56 PM

Any esoteric ones that you’ve invested in?

Ajay July 12, 2010 at 9:07 PM

SBI – tax Saver – Not so performing fund now. Since I had a SIP I am doing a manual SWP every month
FT India Prima Fund – Again not so great now. Planning to redeem and start a SIP with HDFC Top 200 with the amount I get.

Bikram Gupta July 7, 2011 at 1:04 PM

Thanks. A fantastic and simple blog which benefits me a lot!

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