How To Organize Your Finances in 10 Simple Steps

Managing and organizing your finances can be an overwhelming task. The current pandemic has affected every one of us in one way or another. It has thrown people way over the balance in terms of finances. Everyone needs to know how to organize your finances.

Hence, organizing your finances has become more critical than ever. If you want to learn about managing your finances, you have come to the right place.

Organizing your finances should be a priority that you need to get done today.

There are simple and easy ways to organize your income and expenses that will lead to great financial success in the future.  

This article will help you learn about the importance of organizing your finances and the 10 simple steps to do it the correct way.

Importance of Organizing Your Finances

To have a secure and stable financial future, you must be familiar with your financial conditions.

Your finances include all aspects of your life – employment, side businesses, and any other savings you might have.

By the end of the organization process, you should be familiar with:

  • The exact number of accounts and credit cards you have.
  • Any outstanding debt you may have.
  • An excellent budget according to your requirements, lifestyle, and income.
  • Your net worth and credit score.
  • Insurances for your job, health, and life.
  • All aspects of your finances, including retirement plans and estate planning documents.

Now that you are familiar with the significance of organizing your finances keep reading to follow the 10 steps of effectively managing your money.

1. Inventory of All Accounts

The primary step of the finance organization is to write down all your accounts. You can type them in a spreadsheet or use a traditional pen and paper to note the accounts' details.

Remember that this is a critical step in organizing your finances, and you must inventory all your accounts.

During this step, you should evaluate all types of finances and accounts. Some of the most common ones are:

1.   Asset Accounts: Saving accounts, certificate deposits, checking accounts, money market account, and any cash you might have stored at a safe location.

2.   Investments: Business interests, insurance, brokerage, and real estate.

3.   Retirement Accounts: Pension and annuity.

4.   Liabilities: Credit cards, education loans, personal loans, medical debt, and mortgages.

2: Calculate Your Net Worth

Once you have listed out all your accounts, the time has come to calculate your net worth. The following formula simply calculates it:

Net Worth = Total Assets – Total Liabilities

If you have a great number of assets and accounts, it can be challenging to correctly calculate your net worth.

In such a case, you should use modern financing applications, graphs, or systems to complete this step.

It might be tempting to skip this step, but if you don’t determine you will be missing an important part in organizing your finances.

When you determine your net worth, you can set financial goals, create a budget, track your spending habits, and finally take control of your finance.

 You can track your net worth, cash flow, portfolio, investments, and more using Personal Capital. If you’re interested in signing up for Personal Capital for free, please click here.

3. Create a Budget and Stick To It

Budgeting is a critical step in organizing your finances and making the best out of them.

Without having a budget, your finances will be in jeopardy. Budgeting helps you to organize your finance and know when to spend and when not to spend.

Once you have a budget, write down all your liabilities, payment, and monthly expenses.  Also, outline all sources of income and cut down on necessary obligations.

Always review your budget and ensure all things are in place because it's essential to organize your finances.

When you have a budget, you gain better control of your finances by accounting for where it all goes, dollar for dollar.

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4: Maintaining Your Financial Records

Technology plays a huge role in organizing finances. Due to the rapidly increasing eCommerce industry and online payment solutions, keeping track of all the financial records has also become difficult.

However, once you have organized all your financial records, your life will become much more comfortable dealing with financial matters.

Generally, you should use the following two things to manage your records:

1.   Financial Binder

A financial binder is an essential tool in bookkeeping. It should include each financial document you have.

Along with the important documents, you should keep paid bills stored in your binder. It helps in organizing your finances

A financial binder should consist of the following:

  • A comprehensive list of all your assets and accounts.
  • Details about your net worth
  • Paid bills
  • List of recurring bills
  • Asset allocations for investment accounts.
  • Documents to track your debts. Mortgage and financial goals.
  • Your financial plan and any other essential notes.

2.   Organizing Your Online Accounts

Undoubtedly, online transactions and accounts have made our lives much easier, but it raises some serious security concerns.

Also, data experts always tell people to keep changing their passwords every few weeks, but very few people do it.

You should use new applications and trusted platforms to organize your online finances.


5: Organize Your Bill Payment Method

Everyone has a unique way of dealing with money, bills, and other transactions. Some prefer paying with cash, while many people have started to use online bill payment options for smooth transactions.

You should decide based on your household and preferences.

Bill organization does not only mean streamlining the process of bill payment, but it also means that you should take steps to get it under control.

Budgeting is significant for bill regulation.

Furthermore, you should always prefer bill automation methods because they make sure that the bill is paid on time, and it saves your time and energy.

An efficient and organized way of paying your bills will reduce any extra stress you might have while paying bills.

6. Develop Financial Goals

It should not matter whether you like setting goals or not because this step is too important to be overlooked. Some of the common questions that you can ask yourself while creating financial goals are:

  • Where do you see yourself in 5 or 10 years?
  • What are your retirement plans?
  • Are you happy with the way you are spending your money?
  • Are you content with your financial condition?
  • What should you do to improve your financial conditions?

Based on your answers, you should start making short-term and long-term financial goals. Along with creating goals, develop some smart and feasible strategies to achieve them.

A financial plan can help you get ready for whatever is coming your way financially; you can handle it with minimal worry.

Related: 10 Steps to Creating a Solid Financial Plan for Yourself

7. Organize Your Income

It is common to feel anxious while organizing your income and expenses; however, it is the key to your financially secured future.

 An easy way to say this is that your expenses must be significantly lesser than your income if you want to enjoy long-term financial success.

Not everyone can increase their income due to limited resources, but there are numerous strategies that everyone can adopt to lower their expenses.

 A common mistake is that people do not create budgets. Or even worse, they develop budgets but do not follow them. It is bound to harm your finances.

You must have a budget and follow it religiously to keep your expenses in check.

Also, cash flow is an essential part of organizing finances. It means when your income and expenses are flowing in and out of your accounts.

If you are familiar with your cash flow, it can help you stop living paycheck to paycheck and ensure that you have enough income to cover the expenses.

Cash flow budgeting will provide several benefits in your long-term financial conditions.

8. Calculate Your Credit Score

A credit score is calculated after a thorough analysis of someone's credit files. It is a numerical expression that denotes the creditworthiness of a person. 

Interest rates are often determined according to your credit score.

People with a good score will get the finest interest rates and pay lesser fees on loan schemes, mortgages, and credit card balances.

It would not be wrong to state that many people tend to ignore credit score because it has a few applications in their daily lives.

It is a handy tool that can describe your overall financial health.

Moreover, it is better to calculate your credit score and keep updating it, in case of any significant changes in your finances, from time to time.

Otherwise, you will have to face the immense pressure of evaluating your credit score on an urgent basis.

You will need them while applying for loans, mortgages, credit cards, and other such financial applications.

It’s relatively easy to raise your credit score using  Credit Repair.

9. Review Your Financial Documents

Reviewing financial documents is the last step that people must take to organize their finances. Most people find it extremely dull and hence, end up skipping this step.

However, it is essential to keep reviewing documents, financial records, goals, plans, and budgets to ensure they are suitable for your current situation.

Keep in mind that reviewing is a fluid process. There is no end to this organizational process. Once you have accomplished the first eight, all you must do is keep reviewing them from time to time.

Furthermore, if you have all the documents and records in one place and your finances are well-organization, you will not get exhausted while revising your records.

Moreso, the most significant parts of the financial review are insurance and estate plan documents. Insurance companies have the habit of revising their policies occasionally.

You must keep up with the changing requirements of your insurance company and your financial conditions. This is to make sure your insurance covers all the important aspects of your life.

Estate planning documents include the last will, trust, living will, and Power of Attorney. It is important to create and maintain these documents to face any unpredictable circumstances in your life.

The importance of the last will cannot be understated.

In case of your death, your assets should remain protected and treated as per your wishes. Otherwise, it can create many legal as well as family issues.

10. Start Saving Money

Saving money will help you in the future, and you have something to fall back on when the need arises.  Financial emergencies can come anytime in someone's life, and without proper savings, you are doom.

 If you have savings, you will not resort to credit cards and loans and stock up in debt.

The amount of money you allocate towards your saving is to determine the family size, income, and so on. All you have to do is start somewhere and keep moving up. Increase the amount as time goes on, and it will grow over time.  

Saving is one of the best ways of organizing your finance, and it will help you get back on the right financial track.

Here are some ways to save:

  • Retirement Saving
  • Emergency fund saving
  • College saving
  • House saving


The steps discussed above are the most common 10 steps that you should follow to organize your finances. You will reap the benefits of living a financially organized and stable life if you follow them.

They will surely help you to enhance your finances. Well-managed finances will not only help you in achieving true financial freedom but also in leading a stress-free life.

When you have all the essential financial documents and records with you, you will not become a victim of any financial, legal issues.

You will have confidence and thorough records to face any financial problems.

With time, you will be able to improve your finances through better budgeting and organization, and hence, become more financially successful.

Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.