Ladies, gentlemen, non-binary friends and humans of all identities, yes, you can tidy up your finances. Sí se puede, guys. Trust me. And once it's there, it's all about maintenance. Getting there could require some effort and energy, but it's worth it. Gone will be the days of you expending mental bandwidth thinking about an old 401(k) account you know you should rolled over already. 

Go paperless.

Unless you have some weird filing system or profound desire to have dead-tree copies of your gas bill, go paperless. It's an easy and simple way to start eliminating the clutter in your life. If you have trouble remembering to pay your bills, then set up most of your bills on auto pay from your bills, bills, bills account. Otherwise, set aside time to pay your bills every month. But unless you have some awesome hack that I'm totally unaware of, stop it with the paper statements. (If you do have some awesome hack that I'm totally unaware of, sorry I threw shade; will you please tell me about it?)

You can/should still keep pdf copies of your statements saved securely on your computer or hard drive or in the cloud. You might need to reference them in the future. There have been times in my life that I've observed someone trying to get bank activity from a closed account and it's an actual call-center circle jerk nightmare. Probably because the bank doesn't care about making your life convenient. Nope. So make your own life convenient, no paper, only PDFs.

Rollover Old Retirement Accounts.

Remember your first job? Did they offer benefits? Was one of those benefits a 401(k) plan? Or a 403(b), which is the 401(k) equivalent for teachers or non-profit employees. Is it just a blur? 

The first thing you need to do is find out where your money is? The fastest way to do that is to reach out to your former employer's HR Dept. This is also the fastest way to find out if you even participated in the plan and have money sitting around. Call up Sasha or Gary or whoever in HR and ask, "Where's my Money?" And by that you mean, "Can you help me find out if I participated in the 401(k) plan?"

If you didn't participate in any retirement plan, then do not pass go, do not collect $200. You should consider what your retirement options are though. Probably an individual retirement account. If you do have money just laying around in an old 401(k) plan, it's time to roll that bitch over. You have two rollover options: Rolling it over into your new employer's retirement plan or rolling it over into a rollover IRA.

Roll It Over Into Your Current Employer-Sponsored Plan

Your "New" Plan

If you've got access to a 401(k) plan at your current job, find out if you can participate in the plan. Next, find out if the plan accepts rollover funds from old 401(k) plans. If the answer is yes, then you'll likely need to fill out a form from the new plan and send it to the administrators of the old plan. 

When you get the form, I would recommend asking someone in HR to help you out if you're confused. There are couple of key things you want to make sure you are aware of because there are consequences to fucking up this form.

• Pre-tax dollars (traditional) vs. post-tax dollars (Roth). If your "old" 401(k) was a Roth, you want to make sure the new 401(k) is also a Roth, and vice versa with a traditional. Remember, both types of accounts have a tax benefit, it's just a matter of when the benefit is realized. With a traditional plan, the benefit is up front; your contribution is made with dollars that you don't pay taxes on. When you contribution to a Roth, you've already paid taxes on the money you're putting in, but your old, retired self will withdraw it in the future and not pay any taxes on it. 

• Don't Have a Check Sent to You. There is an option on the form to have the funds rolled over "Trustee to Trustee". You want this option. Trustee to trustee means the "old" 401(k) investment bank will send the funds directly to the new 401(k) investment bank. You don't have to worry about anything. This is good. Remove yourself from the equation. The other option is to have a check issued to you. When you get the check, you have 60 days to get that check into your new 401(k) plan. If you don't, then the law says you took a distribution. For a traditional account,  you'll be required to pay income taxes on what you withdrew and if you're younger than retirement age (59 1/2), then you'll also pay a 10% penalty on the balance. Not cool. Not cool at all.

Roll It Over Into A Rollover IRA

Your other option is to rollover the "old" 401(k) funds into a rollover IRA. Many people who are financial professionals will say how smart this is because generally, with an IRA, you have more investment options than your 401(k).

Options means different types of things you can invest in. For example, imagine that investment options are like items on a menu. A rollover IRA is like Cheesecake Factory; the menu has so many options that it's actually paralyzing. No joke, the one time I went to a Cheesecake Factory, I looked at the menu for 10 minutes and then I left because it was too overwhelming and I was also weirded out that they had so many choices.

401(k) plans are a bit more limited. It's just the nature of 401(k) plans. To torture the restaurant analogy, they're a bit more like a specialized restaurant - like a Mexican restaurant that only sells Mexican food. 

More options means more options. I'm not going to call this "bad" or "good" because I'm annoying and getting really into zen shit lately, so it is up to you for interpretation.

Freelancers + Small Business Owners: Separate Business and Personal

Please don't make me ask you this again. I don't want to mom you. You don't want me to mom you. For the love of all things beautiful, just do it already. The first step is setting up separate business account(s) and credit card(s) for your business stuff.

The next step is to actually using your business account strictly for business. That means you put all your business income in your business account and paying for business expenses with the money in your business account. (Yes, paying yourself is a business expense). And to use your personal account for personal expenses. Ok! Cool; yes? 

Listen, if you're freelancing or you have a small business and you're commingling your shit all the time, you gotta stop. ✋ That's not a high five. That's a full stop. Do your debit cards look exactly the same and that's why you think you can still have an excuse to sometimes buy your personal groceries through your business?

Well, march your ass down to the 99 cent store and buy a pack of Sailor Moon stickers and put them all over one of your debit cards so you can make the distinction. If you don't know who Sailor Moon is, I'm sorry for your childhood. If that still confuses you to have to remember whether it's your business card or your personal card with all the embarrassing stickers on it, then take a sharpie and write, "This is your goddamn business debit card" on your goddamn business debit card. Voila! 

If you are having trouble understanding what is a business expenses and what isn't, then I'm sorry I was so harsh earlier. There really is an easy fix. Talk to your accountant. I also made this cheat sheet that is helpful. But disclaimer: I'm not an accountant! Keeping business and personal expeneses separate is a relatively easy problem to fix. So get it handled and move onto the next problem, because you're running a business (freelance or small) and I know you got 99 problems, but commingling your finances ain't one.

Rent Your House. Don't Buy One.

If the goal is strictly to keep your finances simple because you can't even, then don't buy a house. Buying a house complicates your life. You have to care about your house. You have to repair things when they break. You have a fully amortized loan. You have property taxes and homeowner's insurance and all that shit.

Don't Buy Shit You Don't Need. Borrow It If You Can.

This is the ultimate minimalist rule. Don't buy shit you don't need. If you need something, can you borrow it? I really like this idea because it requires you to have a community of people that you can borrow from or lend to.

Alright, friends. Don't sweat the small stuff. Don't freak out. And until next time.