Aggregation with tools icon

Organization is the key to success in many areas of life, and that can apply to your finances, too. When you have multiple accounts and varied financial goals, trying to get a firm grip on your financial situation can be a bit like playing whack-a-mole. Just when you pay one bill, you remember another expense and have to go back to the drawing board to adjust your budget. 

To more effectively manage and invest your assets, you first need to have a clear understanding of where you stand. Without the proper purview, it can be difficult to set your financial goals and begin strategizing about how you’ll get there. That’s where aggregation comes in.

What is aggregation?

Let’s say you have a mortgage with one bank, but your car loan is with a different bank. Then you have a checking and savings with another bank, but your student loans are funded elsewhere. What about your 401(k)? Perhaps you share an investment account with your spouse, but you have individual investments somewhere else. Between checking, savings, loans, Certificates of Deposit, retirement accounts, inherited brokerage accounts and beyond, it can be hard to keep up — let alone track your balances and progress toward your greater financial goals.

Ultimately, aggregation tools empower you with a wide lens view of your financial picture. Otherwise known as financial data aggregation, it refers to the process of compiling your financial information in one accessible place, although it should not be confused with “consolidating your accounts.” While there can be benefits to keeping your accounts with one institution, it’s not always possible. Aggregation allows you to look at the big picture, so you can plan for your future without missing a beat.

Why aggregation works

Aggregation has many benefits, starting with its streamlined capabilities. Rather than checking on multiple accounts through numerous websites or apps, using an aggregation tool allows you to see everything in one place, saving you time and aggravation.

As you amass savings, debts, properties, and so many other pieces of your complex financial puzzle, it can be easy to forget about the little things — out of sight, out of mind. When it comes to developing a financial strategy, the details matter. Having the ability to see how your various accounts are allocated, for example, can help you and any financial professional you choose to work with, make decisions that are more holistic and complete.

Knowledge is power, and aggregation empowers you with intel to help you make smart financial decisions. When you see everything in one place, you can make decisions from a clear and informed vantage point.

When to aggregate 

You can think of aggregation as an organizational tool. No matter how much (or how little) you have to organize, implementing a structure can make your life easier in the long run. As you continue to add to your financial dossier, you can reap the benefits of having the “big picture” at the forefront.

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Seamlessly balance multiple accounts

Aggregation is particularly helpful when you’re managing multiple — and possibly competing — financial goals. For example, you may be saving up for a major purchase, while paying down debt, such as a student loan. Seeing your assets and liabilities side-by-side can help you make informed decisions when emergencies pop up or you have a sudden influx of cash.

Saving for the future means straddling long-term and short-term goals, which can feel overwhelming. Having an organized, wide lens view can help you feel confident as you work through different challenges and objectives.

Aggregation can also help you balance investment risk. When you look at one account, such as a self-directed investment, you might be focused on diversification. Aggregation will help you narrow down where there may be gaps (or too much concentration) in one particular strategy and help you strike a balance. For example, if you’re taking a conservative approach in your 401(k), you may be able to take on more risk in your other investment accounts.

Collaborate  

Aggregation is also a great tool for multiple people to work together toward financial goals. For instance, married couples can use aggregation to control their shared accounts on their way to becoming financial soulmates. Aggregation can be a helpful place to begin when newlyweds have “the money talk” or merge their finances. It can also be an instructive tool for teaching kids about finances. If you share accounts with your teenage children, for example, you can use aggregation as a platform to talk about money management goals and strategy.

Optimize your wealth management 

Compiling your financial data in one central place is the first step in assessing your financial needs and maximizing your potential. The meaningful insights you glean from an aggregation platform can help you make informed investment decisions and help with your greater management strategy. Because the data you get from aggregation is accurate and concise, it removes the risk of human error, so you can rest assured that the choices you make are based on data, not your emotions.

How to aggregate

You could certainly aggregate your finances the old-fashioned way with pen and paper, but today’s digital tools do the work for you (and keep the numbers up to date). For instance, by offering you the ability to input assets and accounts from various institutions to get a comprehensive, 360-degree view of your finances.

When you see all of your assets and accounts together, you’ll get a more realistic understanding of your entire financial situation, which enables you to set feasible goals and assess your needs holistically.

Aggregate for financial empowerment

If you’re like most, you probably have accounts scattered across multiple financial institutions. Take advantage of any aggregation capabilities available to you and get started on the path to realizing your financial goals.

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