At a time when we're all pinching pennies, would you be surprised to learn that the pile of mail on your kitchen counter or the baskets of paperwork on your desk might be costing you more than the daily cup of coffee you gave up weeks ago?

It's true. Every hour that you spend looking under piles, wondering where you put this or that, or being unable to focus because you're not organized costs you. It costs you an hour you're not able to bill to a client. An hour you're unable to spend at the gym, working on your fitness and bringing your health care bills down. An hour with the kids, or even an hour relaxing.

But it can also cost you in the form of late fees, if you don't keep on top of your bills, or extra interest charges if you don't see notices of an increase on your credit card. "Even something as simple as missing a coupon or a sale and paying more than you need to comes into play here," says Alicia Rockmore, co-author of Everything (Almost) in Its Place. "It's embedded in the fact that clutter gets in the way of getting things done, and if you're not getting things done efficiently, it can cost you money."

So while overhauling your budget is great, and cutting out that coffee or your magazine subscription is better, you have to get organized as well. If you go about it the right way, it'll be painless, I promise. In fact, it will be refreshing.

Here's your plan of attack:

-- Ready your resources. Having the right supplies at hand will help make this process easier. Hanging folders, files and labels are necessities. You'll also want stamps and envelopes (so you're not wasting time scrounging for postal supplies for those bills you still mail by hand), sticky notes, a stapler, and some pens and pencils. You will also need a box in which to keep it all. I like a portable one, large enough to fit your file folders, but small enough to take to your accountant or from room to room.

-- Label your hanging folders according to your needs. Here are a few standard categories: Home and auto; healthcare and insurance; saving and investing; income and taxes; and credit cards and other debt. Then you can use file folders to sort subcategories. Let's say you have two credit cards. You'll want one manila folder for each account, and you'll put them both inside the credit cards file. When the books close in 2009, you can start new files and move the old to a standing filing cabinet or box.

-- Dig in. If you know how to clean a closet, you know how to sort and organize your finances. And if you clean a closet the way I do, the first thing you do is pull everything -- and I mean everything -- off the racks and toss it onto your bed or the floor. You want to do the same with your bills and paperwork. If it's all sitting in a pile on your kitchen table, move it to an area that can be messy for a little while. This can take anywhere from several hours to several days depending on how much stuff you have to plow through and how much time you have to devote to the process. Next, go through the other repositories for your bills and paperwork and add those to the pile: Your briefcases, tote bags, desktop and pocketbooks...every one of them should be given the once-over.

-- Start sorting. Once you have everything in front of you, you can make three new piles: Shred, pay and file. Take statements and bills out of their envelopes. If you find a bill that needs to be paid, do it on the spot, says Monica Ricci, an organizing expert and author of Organize Your Office in No Time: "Paying bills as they come in gets them off your plate, physically and mentally. When we know that things are taken care of, it creates a sense of well-being." Brokerage, bank and insurance statements should be filed in the appropriate folders as you go along. And get a good cross cut-shredder to get rid of junk mail and anything else you don't need. Note: When in doubt, it's best to keep something until you're sure. As a general rule of thumb, if you can't get the information again somewhere else, you're better off hanging on to it, says Rockmore. Bank statements are usually available online, if necessary; receipts for your taxes are often irreplaceable.

-- Stay on track. Once you have a system in place, it's all about maintenance. First of all, to keep things simple, do as much of the dirty work as you can electronically from now on. Pay your bills online and opt to receive your statements via email. Eliminating the paper automatically cuts down on the clutter. When the mail comes in each day, sort it, pay the bills that you can't pay over the Internet, and get the whole mess off your kitchen table in a few short minutes. If you just don't have the time -- you're late coming home from work, or your toddler is running a fever -- set up a to-be-filed folder and visit it as soon as you can before it turns into a full-fledged project. Every time you open a new account or switch your insurance coverage, start a new file folder for it. And twice a year, maybe when the kids go back to school and you file your taxes, give your system a once-over and make sure you're still on track.