Organize Your Finances - Expert Advice from a Professional Organizer

Similar to cleaning out a long-neglected garage, basement, or storage unit, organizing your finances can seem like an unbelievably daunting task. Whether not knowing where to begin, not feeling they can effectively manage money, or merely feeling discouraged at the perceived difficulty of the task, many individuals put off organizing their finances.

In fact, according to the Consumer Financial Protection Bureau, 70% of Americans have no established budget, and 40% prefer not to think about money management at all. The Consumer Financial Protection Bureau also posits posts several reasons that prevent Americans from getting organized and properly managing their money. These reasons include:

  • Fear of Failure - Due to the overwhelming nature of first starting a budget, many individuals choose not to begin.
  • Instant Gratification - It is human nature to prefer having something good now, rather than working hard and waiting to get that something good later in life. With many choosing to spend now, instead of saving for later spending and saving priorities are unbalanced.
  • Feeling Invincible - Individuals without a budget sometimes do not believe they need one. Whether due to financial prowess, a large income, or a lack of financial understanding, failing to manage money because you do not think you need to can lead to serious future financial woes.
  • Indecisiveness - Creating a budget and organizing your finances requires an individual to make countless choices. Sometimes the sheer number of decisions necessary for budgeting feels too overwhelming, and consumers choose simply not to think about it.
  • Always Finding a Reason to Spend - Individuals who overspend often have a good reason (in their minds) to do so. Sometimes the individual justifies an extra expense due to a special occasion or makes an exception because he or she has worked overtime and feels the indulgence is deserved. Excuse or no excuse, breaking the budget is still breaking the budget. Unexpected expenses should be thoroughly considered prior to taking out your wallet.

Consider how you feel about creating a budget, thinking about money management, and organized finances. If any of these ring true for you, then it is likely due time that you took steps to get organized and take control of your finances.

How to Organize Your Finances

The following are simple steps you can take to organize your finances and finally free yourself from the burden of an out of control wallet.

1. Create a Monthly Household Budget

In a Forbes article, financial advisors were asked their advice on how to save money. The number one step, they say, is to track expenses. Without a budget, it is impossible to accurately track your expenses accurately. Use a spreadsheet to establish categories for monthly spending and saving based on your total monthly income. Do not worry too much about getting it right the first time; use your first monthly budget as an experiment and a tool to better refine and improve your spending categories for the next month. By tracking expenses, you can ensure that any added expenses or impulse buys will not break the bank, resulting in a negative net income (spending more money than you earn) for the month.

download ebook

2. Automate Savings

A time-tested savings rule is to pay yourself first, yes first. The principle is that if you automatically save a set amount each month, eventually you will not even miss it or include it as money that could potentially be used for other budgeted expenses. By setting up automatic transfers or asking your work's payroll department to split your direct deposit between a savings and a checking account, you will never even have to worry about forgetting to transfer to your savings account or deciding to spend the amount you want to save.

3. Avoid Late Fees, Overdraft Fees, and High-Interest Debt

Putting money into any of these things is essentially throwing it away. Yes, sometimes it might be necessary to use a credit card with a high-interest rate, but you should take every measure you can to pay the balance off as quickly as possible. Also, never incur late fees or overdraft charges due to carelessness. Keep track of your monthly bills' due dates and make sure you pay them on time. If you have trouble remembering, consider setting up automatic payments using electronic bill payment.

4. Create a Filing System

In addition to budgeting, organizing finances also requires good record-keeping, which is necessary for future tax and legal purposes. Create folders stored in a single location (a filing cabinet if you own one) to separate, organize, and store important financial records. These documents might be related to medical expenses, insurance, taxes, loans, your home, business expenses, credit cards, brokerage accounts, and bank accounts. To ensure filing never becomes overwhelming after establishing a good system, commit to filing mail, receipts, invoices, statements, and other important documents weekly or bi-weekly depending on the amount of mail you receive. You can also streamline your filing system by storing some or all of your documents electronically. Sign up to receive paperless statements and bills, which can be accessed electronically. You can also invest in a scanning system to scan an electronic image of your important documents to store on a secure external hard drive or with a secure and trusted cloud-based data storage company.

Budgeting Made Easy5. Start Small

Trying to tackle the entire challenge of organizing your finances in one fell swoop is a mistake. If you take on too much all at once, you will likely feel overwhelmed – especially if start from scratch. Schedule time to dedicate to individual tasks that lead to achieving larger goals such as saving receipts for a month to create your budget's spending categories or sorting through a pile of un-filed documents for storage.

Committing to organizing your finances so a professional organizer would be proud will help you get your spending on track and also achieve your savings goals. If you create a budget, and a filing system, and stick to them, your future self will thank you.

Looking for more ways to organize your finances? For more tips and a free budgeting template, review our "If You Need A Budget, Look No Further!" eBook.

Back to Blog

Related Articles

Are Your Finances Getting You Down? Time to Get Organized!

Are you one of the American consumers who had to pay extra fees due to a lack of good money...

Make a Monthly Budget for You and Your Family [5 Online Tools]


Buying Your First Home? Things To Consider as You Buy Your First Home!

Finding your first home is one of life's exciting yet nerve-wracking adventures. For first-time...