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A messy, cluttered house can be stressful, overwhelming and even chaotic. The same goes for your personal finances. Disorganized bills and budgets are not only stressful, they can actually help drive you deeper into debt. Consumers with cluttered finances are more likely to miss payment deadlines, rack up fees, continue poor spending habits and save less.

So are you ready to clean your financial house? Put away the mop and broom. It’s time to boot up your computer and pull out those bills and bank statements. Let’s get started:

Step 1: Ditch the Shoebox Method

A shoebox – or any other box for that matter – was never intended to serve as a financial filing system. Tossing all of your receipts, records and bills into a giant pile increases the chances you’ll forget to pay them on time.

To better organize your bills and financial records, consider using an online service like, or you can simply use traditional file folders or stackable drawers. Be sure to separate older financial documents from those that are currently due. If needed, create a spreadsheet or document with the monthly or annual due dates of each bill, and post it in a safe place you’ll see regularly.

Throughout the year, compile all tax-related information in a “Taxes” file. You don’t want to be scrambling for a year’s worth of documents minutes before filing your return.

Step 2: Track Your Expenses

It’s vitally important to track and document how much money is coming in, and how much money is going out. This will enable you to identify and adjust your monthly spending habits in order to meet your financial goals. Click here for detailed instructions on how to create and utilize a monthly a budget.

Step 3: Establish a Bill-Paying System

Create a system to pay all of your bills, either online or offline.

Many banks offer automatic bill paying services, which automatically withdraw payment funds from your account. However, this isn’t a completely “hands off” method. You need to ensure your bank accounts continually have enough funding to cover all automatic withdrawals. Before signing up for automatic bill pay, find out whether additional fees are required

If you prefer to handle all bill payments yourself, set aside a day and time each month that’s dedicated to bill paying. A structured schedule will help you meet all deadlines. Remember to allow time for mail delivery, if necessary.

Step 4: Read Your Bills and Account Statements

The fine print really does matter. You should review all financial documents for mistakes, fraud or term changes. If you find credit card statements confusing, be sure to check out this tutorial on how to read a creditor statement. And always, if you have questions about your statements or bills, call customer service for a detailed explanation.

 Step 5: Shred Old Financial Records

Shredding old documents will help you significantly cut down on clutter. As a general rule, ATM or credit card receipts can be shredded if they match your monthly statement and if they aren’t needed for tax purposes. Paycheck stubs aren’t needed once you get your annual W-2. Tax returns older than seven years can be shredded (just check with your accountant first). You should also shred old credit card and loan offers.

Step 6: Stop the Clutter at the Source

If you thought it was impossible to avoid credit card and loan solicitations – think again. You can opt out of most by calling the national credit bureaus’ hotline at 1-888-5-OPTOUT (67-8688).

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