This past month, a cluster of related comments from friends and acquaintances caught my attention. They went something like this: "My wife takes both of our paychecks, and then I'm not quite sure what happens from there." "I have to get home and pay a bill; my husband never does our online banking, and I'm not even sure he knows how!" "I was doing our taxes when I realized I don't have a handle on our tax-free retirement accounts; I hope my husband does." What resonated with me was that these three people were in the same situation I was just a few years ago–not knowing important information about my money.
In college, I majored in finance and marketing. My first job out of school was at Morgan Stanley. I was contributing to my 401(k) by the time I was 22, even purchasing some non-retirement investments along the way. As a result, I was likely more financially literate than your average twenty something, and you'd expect that I'd be on top of my finances.
But let's jump forward to my next life stage. I'd begun work for a startup, which brought with it long hours and lots of travel, plus we had two young children at home. I was overwhelmed to say the least. We started to do more of our banking and finances online, which was great and wonderfully convenient, but those accounts still had to be monitored and the bills paid. My husband, who worked in the markets, handled our investments, and to save my sanity, the day-to-day bills. This was great. I was in heaven.
After a few years, the kids became more self-sufficient and my work travel slowed some. That's when I realized I was totally out of touch with the details of our accounts. Simple things like my user names and passwords had expired, and I didn't have a handle on all of the different account numbers. Since things were entirely electronic, I didn't have all our different accounts written down in one convenient place.
It turns out it's quite common for consumers to have lags in checking their online accounts. A 2015 Bankrate survey revealed that only about a quarter of Americans check their investments and retirement accounts more than once a month. When it comes to bank accounts and credit cards, more than one fifth never check their accounts online.
It's also important to have immediate access to accounts for important matters like paying bills, in the event the individual who handles finances becomes incapacitated. The last thing you need when dealing with a medical emergency is the inability to manage your finances easily.
Enjoy the Convenience. But Stay Connected.
It's quite easy to fall into the convenient rhythm of allowing someone else to take care of your money, or perhaps you stop checking in regularly on your accounts when life gets hectic. Like many, could you too be a little out of touch with your accounts? Consider these questions:
- Are you accounting for all of your accounts? Make sure you're being thorough and aren't overlooking anything. You may have started a 401(k) at an earlier job, or maybe you opened a Roth IRA instead of a traditional IRA one year and haven't contributed since.
- Do you know your user names and passwords for your various accounts so you may access, view and track them online?
Tips to Keep You on Top of the Important Details
- Create a master list of all your accounts, the institution and the account number. Assign each one a number, so if you have 25 accounts you would number them from 1 to 25.
- Here are some ways to keep your sanity when it comes to online sign-on:
Use a password manager such as 1Password, Keeper, Roboform, MSecure, Dashlane or PasswordBox. A password manager is a software application that helps you store and organize passwords. The passwords and websites you enter into the application are encrypted. The user usually creates a single master password, which gives that user access to their entire password database.
Alternatively, you may consider keeping a written log of your information. To help minimize security risk via this approach, you can pair user names and passwords with the number you previously assigned to the account (not the account number or any other account identifier). Then simply keep the master list with the account numbers and the list with user names and the one with passwords separate.
- Schedule a check in with yourself every six months to make sure you are comfortable with your connection to all your accounts. You can line it up with tax season to make it a memorable time of year. If you use a digital calendar, it's easy to schedule these check-ins in advance for an easy reminder. This would also be a time to add new accounts and delete any closed accounts from your master list.
The digital age has many benefits, but surveys show that the majority of us have a tendency to become passive when it comes to mindfully tracking our money. Establishing good habits now can save you a lot of hassle later.