How to organize your finances: a complete guide

organizing your finances, organize your money, savings, save money

Organizing your finances is essential for establishing good financial habits and when investing, saving, and creating a financial plan. If you have never taken on the task of organizing your money, you may be wondering how to start. Getting started is simple, and involves some basic information! Keep reading to find a complete guide on organizing your finances.

The First Step to Organize Your Finances: Tracking Your Income and Expenses

The first thing you should begin with to organize your finances is tracking your income and expenses. For most people, monitoring revenue and expenses works best either monthly or by pay period. Whatever your preference, getting an accurate picture of both is essential. 

You should calculate your household income based on your post-tax income. From here, you should calculate your necessary expenses—things like rent or mortgage payments, groceries, transportation, health insurance, etc. 

Gather your bank statements, financial documents, tax returns, financial records. Having these documents ready will help when beginning the organization process. Once you get an idea of what you are making and what portion of that income goes to essentials, you can start the process of organizing your money!

How to Organize Your Finances Step #2: Think About Financial Goals

The next thing you should do when organizing your finances is to think about financial goals. These goals will help provide you with a trajectory of where you want your income to go. A few common money goals that people have are: 

  • Building an emergency fund
  • putting money away to purchase a home.
  • Taking care of financial obligations to be debt-free  
  • starting a business 

How to Organize Your Finances Step #3: Choose Your Budgeting Method

Once you have a good idea of your income and your essential expenses, you can start budgeting. The process may seem daunting if you have never created a budget before. But the good news is that there are a few budgeting methods that you can use as a template. 

Below are a few of the basic strategies that people use for budgeting:

The 50/30/20 Percentage Breakdown

One of the most used budgeting methods is the 50/30/20 method.1 This method breaks down your income into 3 categories. 50% of your income should go to essentials, 30% goes to recreational costs, and 20% of your income goes into savings for financial goals. 

The Envelope Method

The envelope method involves taking all your income and allocating it into pre-labeled envelopes for every projected expense. Once the funds from each envelope run out, you’ll know that you’ve spent your limit on that category or expense. When using this budgeting method, make envelopes for essentials first, and then move to other spending categories.

The Zero Budgeting Method

This budgeting option is one of the easiest and can work well for first-time budgeters. The zero-budgeting method is simple, “spend” all of your money. In other words put all your income into categories of essentials, recreational costs, and savings. The goal is to have no cash in hand in order to stay on track with your budget. 

You can use any of these budgeting types as a template. After choosing one to work with, you can track everything via a classic excel sheet or notebook, or use a budgeting app! Many apps use the methods mentioned above. Setting them up will take some time. You will need to connect any savings accounts, investment, debt accounts, and other account balances. Choose the most convenient option for you to get the most out of your budgeting plan. 

Adjusting to Your Lifestyle and Keeping Realistic Expectations

Starting an organization plan is one step on the right track to managing your finances! Organizing your financial life will have you thinking about your financial future. And while planning, you may be over-ambitious with the amount you can save or spend. Sometimes you may need to adjust your expectations for your money to match your reality.

And so, as you establish a budget and come up with a financial plan, it will be crucial to take a step back from time to time and re-evaluate your financial situation. Also, keep in mind that there is no perfect way to organize finances and overtime you will learn to avoid common budgeting mistakes and personalize things. Everyone has different income, expenses, and savings goals and will need to adjust their plan according to that. 

How to Organize Your Finances Step #4 Taking a Look at Your Financial Habits

Financial organization can be a great way to look at where your money is going. However, when trying to reach goals or save money, adjusting financial habits may be crucial for keeping things organized long-term. Here are some common negative financial habits to look at resolving while organizing your money:

Missing Bill Payments or Making Late Payments

Whether you have utility bills, are working on credit card debt repayment, or paying a mortgage or car loan, making on-time payments is an essential part of taking control of your personal finances. Late payments on specific bills mean a negative impact on your credit score. And they can mean late fees and paying more interest.

Bad Spending Habits 

Cutting down on overspending is another habit many people struggle to get rid of or resolve. Pay attention to the different spending triggers and learn some basic strategies to stop overspending.

Using Too Much Credit 

Credit card debt is growing for many Americans, and having about 6 credit cards is considered the average. The problem with revolving credit is that you can use money that you don’t have, and even once you pay it off, the cycle of debt starts again. And so, it may be a good idea to take a look at how much credit you are using and how expensive it is for you.

Dipping Into Savings for Non-emergency Purchases or Expenses

Another issue that many people struggle with is using their savings for non-essentials. Transferring funds from savings accounts into your primary bank account is more accessible than ever, making restraint even more difficult. If you struggle with this, it may be worthwhile to learn more about savings accounts.  Some savings accounts can restrict the number of withdrawals each month or for a more extended time, limiting access into your savings for non-essential expenses or purchases.

Living Beyond Their Means

Sometimes your lifestyle may not make sense for your income and budget. Downsizing is another thing to consider when organizing your personal finances.

Seeking Help With a Financial Advisor

For some people, finances don’t make sense, or they may not have the time to pursue financial organization. The good news is that personal finance professionals can organize your finances for you! And depending on where you bank or invest, you may have access to these professional sessions for free or a reduced fee. There are also non-profit organizations and government agencies that can help connect you to financial advising for free.

If you don’t have access to the options above, you may want to pay for this service out of pocket. For some people using savings or borrowing money for this cost may be worthwhile. And even if you have poor credit, there are bad credit loans options available which you can use to pay for an expert! Personal loan options and other small installment loans are also a popular choice for this cost.

Financial advisors or planners help their clients with everything related to their money. All you will have to do is bring in all the necessary financial information. Information such as:

  • all your account balances
  • monthly bills
  • a tax return for income balance 
  • information on investment accounts
  • savings account information
  • bank statements for all your bank accounts
  • any debt accounts (student loans, credit cards, payday loans), etc. 

With all the necessary documents, a financial advisor can do the work of allocating your funds into the right places for any financial goals you may have. Many people use these experts for a short period when starting to budget or focusing on investing.

Get Started With a Plan Today With Help From CreditNinja!

Not sure how to organize your finances? Organizing your finances starts with tracking your income and expenses. From here, think about your short-term or long-term financial goals and consider a budget. Once you establish a plan, re-evaluate it from time to time and adjust according to your financial situation. Being realistic is an integral part of the process! And if you don’t want to do the work of organizing your finances yourself, you can pay an expert to do it for you! You can also learn more through CreditNinja’s blogs! 


  1. Types of Budgets The Four Most Common Budgeting Methods | CFI

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