-- 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.