How to Organize Your Finances in 8 Simple Steps


So you don’t know how to organize your finances.

Don’t feel bad you’re not the only one.

You know how there are some people who can function perfectly normal when things are completely disorganized. I call them a “functional mess”.

I’m the complete opposite.

If things are messy and disorganized it bothers me until it’s fixed. So I usually end up cleaning my kid’s rooms because although I have the intentions of making them clean their room I want it done that instant so I just automatically start picking up toys and clothes up off of the floor.

If you do find yourself being a functional mess with your finances, it probably isn’t working as well as it could be.

Here are 8 steps to help you organize your finances.

1. Evaluate Your Finances

First, you need to see where you stand financially right now. In order to see where you stand you will need to take a thorough look at your overall financial picture. That includes:

    • Annual Salary – Has this changed since last month?  Did you get a raise or change jobs?
    • Monthly Income – Will you get paid twice this month or is this a bonus three-paycheck month?
    • CheckingWhat is your checking account balance?
    • SavingsWhat is your savings account balance?
    • Other – Are there other bank balances that you need to be tracking?
    • Debts – List your debts from smallest remaining balance to largest remaining balance.  Then, list the interest rate for each one.  Remember to include things like car payments, student loans, personal loans, credit card debt, and your mortgage.
    • Retirement {Roth IRA} What is the balance?  What percentage are you contributing from your paycheck?  Does your company match a certain percentage?
    • Retirement {401k}What is the balance?  What percentage are you contributing from your paycheck?  Does your company match a certain percentage?
    • Stocks – What is the balance?  What percentage are you contributing from your paycheck?  [Note that stocks can fluctuate greatly month to month, so it’s important to look at the trends over a longer period of time as well].
    • Mutual Funds – What is the balance?  How have your mutual funds grown over time?  [Note that mutual funds can fluctuate greatly month to month, so it’s important to look at these over a longer period of time as well].
    • OtherAre there other investments that you need to be tracking, like kids’ college funds, bonds, etc.?

These are part of your assets and liabilities, you will list all of your assets and liabilities on a piece of paper or you can use this free template.

Assets: are any items of value that a person owns and they are broken down into four categories:

  • Liquid assets
  • Real Estate
  • Personal Possessions
  • Investments

Liquid assets – consist of cash and items that can be quickly converted to cash. The money in your checking and saving accounts is a liquid asset.

Real Estate – consists of land and any building or structure that is on it.

Personal possessions – are items such as cars and jewelry.

Investments – include retirement accounts and securities, which are your stocks and bonds.

Liabilities: are simply what you owe. There are two categories liabilities fall in:

Current liabilities – which consist of bills and small loans


Long-term liabilities – which usually take more than a year to pay. This includes student loans, credit cards, cars, and mortgages.

Now that you have your assets and liabilities listed you can move on to the next step.

2. Net Worth

Your net worth is your assets minus your liabilities.  Also known as your measure of wealth. If you have a negative number after you calculate your net worth, this means you owe more than you own.

You can use the same template I provided above to calculate your net worth, here it is again.

3. Record Your Income and Expenses

Your Income and Expenses are different than your assets and liabilities, even though the two coincide with each other. Step 1 and 2 gave you an overall idea of how you’re doing financially as a whole by giving you your net worth. Kind of like looking at a puzzle completely put together.

Now you want to see those individual puzzle pieces which are where you stand on a more consistent basis, this is where you will see how your finances affect you daily. This will lead you to your monthly cash flow.

When considering your cash flow you look at two things:

Income: List any income you receive, such as your salary and any additional income from a side job, stocks/bonds, and money you may have earned from sales.

Expenses: List your total monthly expenses. You can do this one of two ways, take the average of what you have over the past three months, or you can figure out your spending for the year and divide by twelve.

If you are saying this reminds you of a budget you would be correct, this is how your budget begins with determining your income and expenses.

You can use this budget spreadsheet to help record your income and expenses or use a piece of paper

4. Calculate Your Cash Flow

Now that you have your income and expenses listed, you can calculate your monthly cash flow. You can do this by simply subtracting your total expenses from your total income.

Your cash flow will either be positive or negative, you will use the outcome to change your financial situation.

5. Get Your Credit Report and Credit Score

Now that you have your net worth and your cash flow figured out. It’s time for you to get your credit reports and credit scores.

You can get your credit reports for each of the three credit bureaus for free annually at

Do you know that one in three millennials doesn’t know his or her credit score?

Your credit score and report is an absolute game changer for many things, so you should absolutely make this a priority and take the time to do this!

6. Overall Financial Evaluation

The first 5 steps allowed you to gather all the necessary information needed to successfully prepare an effective budget in the next step.

Let’s do a quick recap of each section….

Net Worth

Your net worth will either have a positive number or a negative number if you have a positive number for your net worth you have more assets than liabilities. If your net worth is negative then you have more liabilities than assets. If you find your net worth is negative or lower than you want it to be, set a goal to increase your assets and decrease your liabilities. Now that you know your net worth now you can change it.

Cash Flow

Just like your net worth, your cash flow will either be positive or negative. It will give you an idea of whether you’re overspending or underspending.

If your cash flow is positive that means after all your expenses are paid for the month you have money remaining. That’s great! But you don’t just want to go and spend it unwisely if you were unhappy with your net worth how about putting that into a savings account to contribute to your assets.

If your cash flow is negative that means you can’t pay for all of your expenses, so you need to IMMEDIATELY take action. Try figuring out some ways to eliminate and/or reduce some of your expenses.

You will focus more on this in step 7 when you create a plan to achieve your financial goals.


What does your savings look like?

I personally recommend having multiple accounts one of those accounts are your emergency fund.

At a minimum, you should have 3 months of living expenses saved, but I say ideally at least between 6-12 months depending on your household dynamics which you can learn more about here. When unexpected things happen, you never know how long you’re going to be down so it’s always best to be over prepared.

Credit Report

Read all three of your credit reports so you are aware of what’s been reported, and look for any errors that may have occurred.  Here are some common errors to look for:

  • Information that is not yours because of confused names, addresses,  etc.
  • Problems because of identity theft
  • Information from an ex-spouse
  • Outdated information
  • Incorrect payment status
  • More than one delinquent date on an account
  • Wrong notations for closed accounts
  • Remedied delinquencies not reported as such

If you have incorrect information on your credit report, you need to get it corrected ASAP. Contact the credit bureau that are reporting the incorrect errors and the agency must investigate and dispute within 30 days of your request.

Negative entries remain on your report for 7 years. After 7 years, the negative entries will fall off, but if there are some that are still showing after 7 years you should request the information be removed by contacting the agency reporting the information.

Don’t forget to Evaluate your credit score along with your credit report, you can do that by using the following guidelines:

  • Less than 500: Very bad credit
  • 500-549: Bad credit
  • 550-599: Poor credit
  • 600-649: Fair/Average credit
  • 650-699: Good credit
  • 700-749: Very good credit
  • 750 and up: Excellent credit

7. Create Frequent Budgets

After you have evaluated where your finances are right now, you can make a plan to take you wherever you want to go, as long as you put in the necessary work.

Yes, a budget, I know that b-word again, how dare I.

Budgeting is essential to organizing your finances, so take your time and make sure you are creating a plan that works for you and your family. Keep in mind the previous steps to help you focus your budget.

Get started budgeting by following my 5 simple steps to creating a Budget.

For more information on how to get better organized and things to consider when budgeting, use these tools:

8. Review, Revise, and Repeat

You have now completed 7 steps, make sure you are setting aside a time to review your finances, revise things that may have changed, and keeping yourself up to date.

I recommend checking your credit report monthly (signup at and get free notifications when your score changes). I recommend budgeting based on your pay frequency, it will keep you up to date and keep you in the now so no more guessing your way through a monthly budget.

Staying on top of your finances is very important, but it doesn’t have to be hard. Just make sure you follow these steps and you will be good to go.

A Final Word!

You can run but you can’t hide! Your finances will not magically act right, you need to make them a top priority in your life. To have financial success for you and your family, you need to take control of your finances NOW!

And the best way to do that is to organize your finances.

What are you doing to organize your finances?

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  1. Miguel @ The Rich Miser August 17, 2017
    • Jasmine Golden August 18, 2017

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