The picture you see is a picture of my jam-packed pen holder filled to the brim with all manner of pens, pencils, highlighters, scissors, Sharpies, and even a fake Mont Blanc pen we found on the flight back from Shanghai last year. Why is my pen holder a perfect analogy for my personal finances? The pen holder is an collection of all the pieces of junk I’ve collected over the years, from the free pens at trade shows to the ones I’ve taken home from the office. There is no rhyme or reason to it, no organization, just everything in one wire-frame pen holder.
Our personal finances, as I’ve learned when I put together our Personal Finance Users Guide , are very much the same way. I have a credit union account with my former employer, I have a bank account from back home in New York, I have a lingering 401(k) account, etc. etc., the list goes on. The fact of the matter, especially when you’re talking about simplifying your life, is that I don’t need all these pens much like I don’t need all those accounts. I have these pens because I’ve accumulated them over the years, which is a bad reason to ahve them.
So, how do I declutter the holder and declutter my personal finances? Easy, just remove the things I’ve accumulated over the past few years and reduce it to only that which I absolutely need. When it comes to pens, I honestly only need a few ball point pens, a highlighter, a Sharpie or two, and the scissors – everything else is going into a bag in the supply closet.
As for the personal finances, I’ve consolidated all my former 401(k)s into my Rollover IRA at Vanguard , closed all the unnecessary extraneous checking and savings accounts, consolidated credit cards , and cleaned up my paper records (shredding anything I didn’t need, it was two big bags worth). All that was after only five years of post-college working life! Now, every account that we’ve kept has had a reason for being there and that’s how it should be.
In the future, I think decluttering my personal finances will be an annual affair along with rebalancing investment portfolios. So, what does your pen holder look like? 🙂