Personal Finance The Frugal Handbook

TFH #15: Clean Up To Save Up

Most people have a habit of cleaning up every once in a while.

Maybe it’s cleaning your room every week or purging unused items sitting around your house.

But many people don’t have the same habit of cleaning up their finances.

Not only does cleaning up one’s finances make it easier to manage, but it can result in some cash savings as well.

But what do I mean by a financial clean-up?

No, this doesn’t literally refer to dusting your piggy bank that’s safely tucked away in your drawer.

Instead, this means tidying up the various pillars of your personal finances – savings, expenses, investments, and insurance.


Where are all your savings stashed?

Many people have cash lying around in several different accounts.

But many savings accounts have account balance minimums and charge fall-below fees – are you using any such account, and are you being charged this fee?

If so, you may have been losing a few dollars every month.

Are your savings optimized for you?

Some people prefer optimizing interest rates and thus use many different accounts, but others may not find much benefit from the marginal interest they may receive by using multiple accounts and opt for simplicity with fewer accounts instead.

Decide which is best for you and make the changes accordingly.


What do your monthly expenses look like?

Many people don’t know what they spend on and lose track of how much they spend every month.

This often results in reckless/careless spending because they often think that they’ve spent less than they actually did.

Do you know what you spend money on?

They may also be paying for things that they don’t need anymore like an old subscription that they meant to cancel, which essentially loses them money every month.

Tracking expenses can help to mitigate these pitfalls and manage one’s expenses better.


What platforms are your investments on?

With the prevalence of online brokers offering attractive rewards for opening an account with them, you may find yourself with more brokerage accounts than you need.

It’s probably a good idea to keep track of what investments you have in each of these platforms.

And if you find it tiring and difficult to do so, or just don’t find it necessary to have so many accounts, it might make sense to consolidate your investments even if it will cost you some fees along the way.

What fees are you paying by using these platforms?

Some brokers and robo-advisors charge recurring fees that take money out of your pocket every month.

While some fees like expense ratios of ETFs are unavoidable, other fees like broker custodian fees can be avoided simply by choosing a broker that doesn’t charge this fee like Interactive Brokers or Syfe Trade.

Take some time to review the fees you’ve been paying, determine whether you think it’s worth continuing to pay these fees and take action accordingly.


How many insurance plans are you covered by?

If you have multiple plans, you might want to check if there are any overlaps in terms of coverage to see if it makes sense to change them.

This can help to reduce the cost of premiums without losing coverage.

Conversely, if you feel you don’t have enough coverage, you might want to consider increasing it to protect yourself in case of emergencies.

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