Do you remember the game hide and seek?
Have you ever played hide and seek with a toddler? They’re typically terrible hiders. In fact, my 2-year-old broadcasts where she’s hiding before I’m done counting; and her hiding spots are usually obvious, like in the middle of the room.
The older kids are a different story. I’ve often given up looking for my 8 and 11-year-olds because they hide in the most obscure places. It’s frustrating when I can’t find them.
In a way, I think hide and seek describes how a lot of people manage their money these days – they don’t know where it is and when they really need it, they have to do a lot of work to find it. Most of the time, it’s easy to remember where your money is when it’s a new account or a young investment; on the other hand, an old account or investment may no longer be top-of-mind and will take some time to track down when needed.
In order to manage your money effectively, it’s important to understand where your money is and how it’s working for you. How many checking accounts do you have? How much is in your 401k and your 401k from 2 jobs ago? What about that CD you invested in 10 years ago?
Don’t play hide and seek with your money. Here are 4 tips to always know where your money is:
TIP #1: Make a list of all your bank accounts and their balances. Remember that “groceries-only” checking account you opened and started filtering money into 3 years ago? No? Like playing hide and seek with an 11-year-old, these accounts may be hiding somewhere in the back of your mind or the back of your filing cabinet. Now is the time to dig up old checking and savings account records and give yourself a bird’s-eye view of your money.
If this is your first time making this sort of list, it may be helpful to print out a physical copy of each account statement. While there are a lot of great digital tools out there to help keep track of your money, I recommend printing out so YOU have an understanding you where your money is and can use the online tools for support moving forward.
TIP #2: Print out a copy of the most recent quarterly statement for all your investment accounts, 401ks, IRAs, online stock trading accounts, etc. For the same reason you printed out your checking and savings accounts, having these records on hand helps give you a complete view of where your money is being invested and helps you identify any holes in your money management plan. Investment accounts are especially important to keep track of because they are designed to make you money.
TIP # 3: Print out a copy of the declaration page or statement of benefits for all your insurance products – auto insurance, homeowners insurance, flood insurance, health and life insurance, etc. Insurance represents money. You’re essentially buying a lump sum of money, for a potential catastrophe, at a discount. Make sure you’re properly covered and understand the various types of insurance products you have. Finding out you don’t have enough coverage is something that shouldn’t be discovered in the event of an accident, just like your 11-year-old jumping out to scare you in hide and seek, insurance coverage shouldn’t take you by surprise.
TIP #4: Meet with your insurance and investment advisors. Advisors are the secret weapon in this game of hide and seek with your money. They know how to make sense of your accounts and can help you evaluate your plan and improve your money management skills to be in line with your long-term goals. For example, if my goal is to retire in 15-20 years, then I better make sure my money is invested appropriately to get me there, that every dollar is working towards that goal and that I am protecting those dollars through wise use of insurance from an unforeseen event, like an accident.
Don’t Lose Track of Your Money – Make it Work for You
These days, it’s easy to lose track of your money. Don’t play hide and seek with your accounts, investments, and insurance. Keep all your account information in a place where you can see it. By having a full understanding of where your money is and how it is working (and can work) for you, you will create a solid plan for your money and will feel confident in the decisions you make. In order to plan for the future, you need to make wise decisions with your money today.
Do you know where your money is?