Your Family Should Be Able to Access Your Online Accounts, if Necessary

This spring my wife has been on an organization kick, which was motivated by a show she had been watching on Netflix. She was organizing junk drawers, closets and pantries at a mind-numbing pace. As I watched her throw out objects we had no use for and simplify messes, I became motivated to organize the financial household as well.

I realized that, because of the ease of downloading apps, my phone and e-mail have quickly become a
financial junk drawer. I had apps for accounts I no longer use or regularly contribute to. Aided by technology, I have been able to live with a far more dish­eveled financial picture than I would if I were confronted with monthly paper statements.

Therein lies an interesting concept: Technology and going paperless are meant to make our lives easier; however, if gone unchecked, they can do the exact opposite. My goal was straightforward: Simplify my financial life to the point where I felt comfortable that somebody else — namely, my wife — could step in without having to deal with the inefficiencies and redundancies that existed. This meant aggregating similar accounts, tracking auto payments to various credit cards and creating an instruction sheet to summarize the household. I broke the process down into three main steps:

1. Create an Organized Inventory

This is the toughest, most time-consuming step. It’s essential to understand what accounts you have outstanding. This may require some investigative work: Look back through e-mail for e-statements, check various apps on your phone, even browse through bookmarked websites. This is also a good time to make notes of the various websites, user names and passwords. 

Once collected, begin the process of grouping similar accounts to check for redundancy. The following list in an example of potential accounts that can be grouped together:

  • Retirement accounts: 401(k)s, individual retirement accounts, Roth IRAs, etc.
  • Brokerage accounts: individual/joint accounts, trust accounts, etc. 
  • Insurance policies: home, auto, term-life, whole-life
  • Saving and checking accounts
  • Debt and credit cards: mortgage, auto, credit cards
  • Miscellaneous: 529 plans, health/flexible spending accounts, etc.
This is also a great time to check the status and make note of the beneficiaries on your accounts. Having the correct beneficiaries on your account is critical to good financial planning. Finally, while going through your credit card history, make note of what auto-payments are outstanding for which cards.

2. Take Action

Now that the information is in front of you, the cleanup can begin. An example would be consolidating similar accounts, when possible. This could include taking a 401(k) from a previous employer and rolling it into your IRA (the same can be done for HSAs, too). Update your beneficiaries where they’re outdated. 

3. Summarize/Document

This step is where planning begins. Ask yourself: If there were an emergency and I was no longer able to carry out the management of the finances, what would I want a spouse, family member or trusted contact to know? 

Creating a cheat sheet with important contacts, lists of accounts, user names and passwords along with the location of key documents (such as the estate plan, beneficiary forms and tax filings) will go a long way in providing you peace of mind that your financial household is organized so that affairs can be efficiently conducted.

There’s no time like the present to organize your finances. They’re bound to only get much more complicated. 

Matt Mondoux sits on the investment committee and is an adviser at Blue Chip Partners, Inc., a privately owned, registered investment advi­sory firm based in Farmington Hills, Michigan.

This article was originally published in the June/July 2019 issue of BetterInvesting Magazine.

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