The other day I met a guy who told me about a new kind of financial planner called a life planner who takes over all your busywork so you can concentrate on something important, like composing an opera or training for the Ironman triathlon.
Now, I'd heard of life planners, but I thought their role was more limited, like helping you figure out how to set goals. Nope, this guy said. First they help you decide on your priorities. Say it's cutting back on work hours so you have more time for your kids. OK, the life planner says, and he gets to work doing everything from managing your investments to paying your bills and scheduling your vacation, and maybe putting a new roof on your house. He arranges it, of course. He doesn't actually do the roofing work.
Wow! This I could use. But I suspect you'd have to be Tom Cruise to qualify. Still, the rest of us can learn something from this life-planning notion. We need to get our priorities straight and then simplify the everyday tasks and sweep aside the unnecessary ones so we have time to accomplish the big things we want to do.
Here are 10 year-end housekeeping chores that could simplify your life in 2002.
Close all extra bank accounts.
Which are extra? You need one linked checking and saving account and that's it. I remember when my husband and I kept two or three accounts so we'd always have access to money when we needed it quickly. Sometimes one bank would put a lock on our account for one reason or another, usually because they'd require three weeks to clear a check we'd deposited.
But I haven't found that to be an issue for years. In fact, I live in New York and bank at Wells Fargo, which is in San Francisco, and I'm amazed at how quickly checks are credited to my account. I've been able to use my ATM card all over the world, or at least the parts of the world that I've been lucky enough to visit. One account means just one statement to deal with.
Set up an automatic deposit each month from the checking to the savings account.
You might think this is just sleight of hand, but I don't agree. Most of us don't save money if it means we must write a check for it. Many people won't save money if it means locking it up in a mutual fund either. By moving it over to savings, you can have it both ways. You've earmarked it as savings, but it's still within reach.
Don't touch it.
When you get enough of a cushion here, start siphoning off a bit for automatic deposit to an investment account.
Cancel all but two credit cards.
As I've been shopping over the holiday season, I've gotten all the routine offers to open department store credit cards, sometimes with an extra 10 percent off whatever I'm buying that day. I resist them. Extra credit cards tempt you to spend money, they mean more cards to keep track of, and they clutter up your credit report, making it more complicated to get a mortgage, for example.
Set up automatic online payment for routine bills such as mortgage and car payments.
Pay other bills online, too. Setting this up seems like a hassle initially. I remember it well. But once you have all your creditors and regular payees such as the garbage service and telephone company in place, bill-paying takes just a few minutes a month.
Set up deposits to college accounts for your kids, too, if you can swing it.
Even a few dollars a month will help. Ditto for an IRA if you qualify.
Eliminate accounts at all but one broker.
Broker minimum account fees and minimum balances are becoming more common and higher, too. You want to avoid them, and you don't want to have to read all the literature that warns you of coming fee changes. You want to streamline.
Do a portfolio inventory.
Do you own more than six to 10 mutual funds? Why? That's too many to keep track of and more than you need to do the job. If they're all doing the same thing, you're paying too much to get an index-like return.
Dump the stocks you're holding for emotional reasons.
(I hope I do this.) Following these stocks takes time, not to mention the emotional energy required to berate yourself for buying them in the first place.
The roller-coaster market over the last year made mince meat of asset allocations. Now is the time to reset yours. Then leave it alone for the rest of the year.
Two final tips: Try an all-in-one program such as Quicken to handle all your personal finance and investing chores. And consolidate all your estate planning details and last wishes in a book or software program.
Don't discount the time you spend worrying. I'll bet it's double the time you spend doing the actual financial tasks. By consolidating everything in a place where you know someone else can find it, you'll eliminate one big source of fretting for 2002.