“A small debt produces a debtor, a large one, an enemy.”

BY NANKIE BAWA | 2 mins read

Bonfires are lit just before the night of Holi, to signify burning of Holika that is the victory of good over evil. In preparation for the festival, you also spring clean your home. Now, you might be wondering how is the above qoute related to facts I stated about this festival, Holi. But this Holi let’s bring that same spirit in managing your finances as well; steer clear of all the bad debts and financial clutter. It’s not a one-day affair, agreed. So, start with taking stock of the debts that are costing you more in terms of rate of interest and low tax benefits, and have an idea in situ to clear them off. In addition, review your bank statements and mastercard bills to spot the financial clutter.

Financial clutter isn’t as visible as an inaccessible garage filled with stuff. But a mess of bank accounts, credit cards, 401(k) plans and therefore the like can cause not only major hassles, but also an insidious nibbling away of the clutterer’s assets.

Fortunately, financial clutter are often cleaned up, and therefore the payoffs — lower banking costs, less risk of fraud , better financial planning and an end to the chaos — are well-worth the time and effort.

“This takes work, it takes real energy to reverse the disorder. If you don’t do it, it becomes more cluttered. If you’ve moved the system to a higher state of order, you’ll look at differently because you know if you let it go again, it’s going to take a lot of work to clean it up.” says Conrad Ciccotello

Here are a few things which could help you clear your financial clutter:

1. Identify financial clutter

2. Consolidate bank accounts

3. Get rid of credit cards

4. Roll over 401(k) accounts

5. Deposit negotiable instruments

6. Shred old account statements

7. Liquidate or insure valuable collectibles