Get Your Money Under Control: 7 Smart Ways to Organize Your Finances

Urban woman
Carmen Mandato/The Penny Hoarder
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Not all of us are born to be organizational wizards, okay? Not all of us keep everything neatly filed or color-coded or alphabetized or prioritized or sorted into nice, neat, separate boxes. We’re just not like that, and we never will be.

But if you ever want to get ahead in life, you’ve got to organize your finances. You’ve got to take your money and get it completely under your control.

It’s the only way you’ll get any of the big stuff done, such as paying off your student loans, taking a real vacation, buying a car, buying a house. Unless you’re willing to get organized, none of that stuff will happen.

A Checklist for Organizing Your Finances

How are you going to organize your personal finances, though?

We’ve got some tips. Here are seven things you can do, concrete steps you can take. Try doing them one at a time, step-by-step, and they’ll almost feel easy.

1. Organize Your Income With One Smart Account

Simplify, simplify, simplify. Working with too many different accounts can contribute undue stress to your money management. Instead, funnel your income into one account that does everything.

We’ve reached a point where online banking services are easier to use than the traditional banks. They’re cheaper and more accessible.

One of our favorite companies, Aspiration, works on a pay-what-is-fair model. You choose to set a monthly tip up to $20 or as low as $0, and you can change it anytime.

You’ll get access to an online-only account for spending and for saving. The spending account comes with a debit card that earns 0.5% cash back on all your purchases, plus free ATMs, so you can easily access your money when you need it.

After you open your Aspiration account, use it to organize your income:

  • Automatically deposit a portion of your income into your spending account, and use that to cover basic expenses like rent and bills, plus fun stuff; like eating out, shopping or going on vacation.
  • Deposit what’s left into your Aspiration savings to keep it out of sight and let it grow. You’ll earn up to 2.00% APY as long you deposit just $1 a month. We recommend squirreling more when you can, but we like that you won’t lose the perk when you can’t.

2. Make a Budget That Works for YOU

A woman types in her fiances into a budget spreadsheet
Chris Zuppa/The Penny Hoarder

How do you keep track of your monthly bills? You’ll need to set up a budget, which is about as exciting as going to the dentist. But when you decide to finally do it, that means you’re getting serious about your money — and your financial goals.

It’s important to set up a budget that’s a fit for you (how else will you stick to it?). Follow these basic steps:

  1. Set a financial goal. Why do you want a budget? Your reason will be your anchor and incentive as you create a budget and stick to it. Set a short-term or long-term goal.

  2. Log your income, expenses and savings. You’ll want to use a spreadsheet, budgeting template or app to track all of your monthly expenses and spending. List out each item line by line. Be sure to include a line item for savings.

  3. Divide your expenses into “needs” and “wants.” “Needs” are mandatory expenses like your rent or mortgage, utilities, phone bill, car payment and groceries. “Wants” are non-essential expenses like entertainment, clothes and dining out.

  4. Adjust your expenses to match your income. You may need to cut optional outings like happy hours and eating out, pull the plug on cable TV, or start meal prepping.

3. Work to Get out of Debt (Even If You Have No Money)

When you think about how much debt you have, you might feel a little anxious.

A lot of us are being crushed by credit card interest rates north of 20%. If you’re in that boat, consolidation and refinancing might be worth a look.

That’s where a company like Fiona can be helpful. It can help you find personalized lending options to refinance or consolidate your debt to potentially save thousands of dollars in interest.

Fiona will show you all the lenders willing to help you pay off your credit card and eliminate the headache of paying bills by allowing you to make one payment each month.

If your credit score is at least 620, you could potentially borrow up to $100,000 (no collateral needed) and compare interest rates, which start at 3.84%. Checking rates won’t hurt your credit score. The idea is to secure a loan at a lower interest rate, potentially helping you save thousands.

Take, for example, Katherine, who faced $12,000 in credit-card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.

If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes!

4. Take a Look at Your Credit Report

Your credit score is important. The better your score, the better deal you’ll get on a mortgage, car loan or credit card. We’re talking big money here.

Pro Tip

Even if you’re not buying a house anytime soon, a lousy credit score means you’ll get hit with a high security deposit when you rent a car or move into a new apartment, so it’s worth monitoring now.

But did you know your credit score could be inaccurate? One out of five credit reports have an error, according to a study by the Federal Trade Commission.

To keep a closer eye on your credit, get your credit score and a “credit report card” for free from Credit Sesame. It breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how to address it.

James Cooper, a motivational speaker, raised his credit score 277 points using Credit Sesame. Now he talks to high school students about the importance of having good credit and uses what he’s learned through Credit Sesame as a blueprint for his lessons.

Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.*

5. Let This App Cut Your Monthly Bills

On the phone with your cell phone or internet provider, trying to haggle a lower monthly bill?

Go ahead and hang up. (We know you’re probably listening to crappy music while sitting on hold, anyway.)

Download Truebill, an app that’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees.

After downloading the app, create an account, and link your bank account and/or credit cards. Turn on the bill negotiation and outage protection features. Boom. Truebill is already searching for potential refunds — it might get you a refund even when you didn’t know an outage occurred.

On average, Truebill says it helps customers save more than $700 a year by lowering their bills, canceling necessary subscriptions and getting refunds.

If Truebill successfully negotiates savings for you, it keeps 40% of the first year’s savings, and you keep the rest.

Signing up and using the app is free, though there are some paid premium services that are totally optional — but could totally be worth it.

6. Let This Company Fix Your Retirement Plan

You have a 401(k) — kudos for that, but is it doing what you need it to?

If you’re like most people, you have no idea whether your 401(k) is on pace for your retirement or just sputtering along.

Chances are, your 401(k) could be doing a lot better. Take control with help from Blooom, an SEC-registered investment advisory firm that can optimize and monitor your 401(k) for you and keep it speeding toward retirement.

It just takes a few minutes to get a free 401(k) analysis that will show you whether your investments are allocated properly and whether you’re losing money paying hidden investment fees. It’ll even tell you just how much more money your account could earn by the time you want to retire.

Pro Tip

Confused by your retirement plan? If your employer sponsors a 401(k) plan, you should have access to people who can answer questions in your best interest — a.k.a. HR.

After that, if you sign up, it’s just $10 per month to have Blooom monitor and maximize your 401(k). Bonus: Penny Hoarders get a special rate of $99 per year with the code REEETIRE.

Think of Blooom like a mechanic constantly fine-tuning your car’s engine so it gives you the best possible performance and gas mileage. Except it’s your 401(k) — and your future.

7. Have a Huge Bonfire

You’ve probably got a bunch of boxes and folders filled with financial paperwork you don’t need anymore.

Scan all of those docs, and save them in a secure file on your computer (this is important – you need these!). Then, eliminate all the physical and mental clutter… with a bonfire.

It will feel good to burn those superfluous stacks, and you can also use it as an excuse for a fun get-together with your friends.

Once you’re done, say goodbye to extra paper. Sign up for electronic statements on all your accounts to keep your life tidy and organized in the future.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He is sometimes organized.

*Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.