6 Ways To Tell If You’re A Financial Hoarder
I have a confession to make, I’m a financial hoarder, or close to it.
What is a financial hoarder? And why does it matter? A financial hoarder is someone who keeps extra bank accounts, investment accounts, budget categories, credit cards etc. The more financial “stuff” you have, the more you likely it is that you’re a financial hoarder.
Understanding this is important because it can affect how you manage your finances.
Just like how physical clutter in your home can affect your ability to move and think, your financial clutter can also have an impact on how you manage your finances. The more financial “stuff” you have the more mental energy you’re going to devote to it. This can lead to financial fatigue where you just give up entirely, and that’s not good.
The simpler your financial life, the easier it is to manage, and the more likely it is that you’ll have success with your finances.
When I do the quiz below I’m close to being a financial hoarder. Let’s do a quick tally…
In total I have 6 different checking and savings accounts. (It doesn’t help that Tangerine lets you open more than one savings account from their app). I have a couple of savings accounts open for specific goals. Not to mention we have joint checking and savings accounts too. Not off to a great start.
I have a few credit cards. This is due to the credit card rewards bonuses. These reward bonuses help us get free flights and hotel stays across the country, but it doesn’t change the fact that they’re still open and being used. Getting messy already.
I have a few investment accounts and I hold more than 3 different securities. Not many more, but I do hold more. Although it’s more complex, holding more than your basic 3-fund ETF portfolio lets me choose tax efficient securities for each type of account.
My budget is actually pretty good. I have only 16 budget categories!
We don’t check our net-worth very often. We only check once every four months at our regular check-ins. This helps us avoid a lot of the daily ups and downs in the stock market. Checking your net-worth too often can just make you sad.
My total score? I’m basically tripping over bank accounts. I could probably benefit from a bit of financial spring cleaning. There are definitely some bank accounts and credit cards that could be closed.
Wondering how you score? Take the quiz for yourself and see if you’re a financial hoarder!
Are You A Financial Hoarder Quiz?
- Do you have more than one checking and one savings account? Add one point for each extra account.
- Do you have more than two credit cards? Add one point for each extra credit card.
- Do you have more than three investment accounts? (count each TFSA, RRSP, RESP, pension and non-registered accounts separately)
- Do you hold more than 3 different securities? (An ETF would be one security) Add one point for each extra security.
- Do you have a budget with more than 20 categories? Add one point for each extra category.
- Do you check your net-worth more than once per month? Add one point for every time you check your net-worth/finances.
1-10 points = You might have a problem, but you’re still ok.
11-20 points = It’s getting a bit messy in here.
21-30 points = Yikes, I’m tripping over bank accounts!
30+ points = You might be a financial hoarder!
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Tax planning, benefit optimization, budgeting, family planning, retirement planning and more...
Hah, I didn’t need to do the full quiz and knew the answer to the question!
I have too many bank accounts and credit cards! Just signed up for two recently!
You and me both!