Financial House Cleaning: How to Organize Your Finances in 2025

Organizing your finances is about more than just saving money and meeting big goals. It could also glow up your quality of life and give you more peace of mind. Here’s how to organize your finances so you’re less overwhelmed and more in control.

Create a budget (or tweak your current one)

A solid budget could make it easier to organize your finances, track your spending, and work toward different goals, whether it’s building an emergency fund or paying off credit card debt.

Your budget should list your current expenses, from fixed costs like rent and car payments to variable expenses like groceries and entertainment. If you already have a budget but find  there’s no room for savings or debt payments, you may want to tweak it. 

Here are a few ways to set up a budget:

• Pay yourself first. Calculate how much you earn after taxes and subtract your expenses. The figure you come up with may give you an idea of how much you can afford to pay yourself every month. From there, set up an automatic transfer to your savings account so that you’re not tempted to spend the money you’re trying to bank.

• Try the 50/30/20 plan. With a 50/30/20 budget, you allocate 50% of your after-tax income to your needs, 30% to your wants, and 20% to debt or your savings goals. 

• Use whatever works best for you. Some people like budgeting apps, while others prefer to make a spreadsheet or even keep a paper budget. There’s no one right method, so do what’s easiest and most convenient. 

Make sure you have the right insurance

Insurance is a big part of organizing your finances. First, take a look at your health insurance. Here are some things you’ll want to pay attention to:

• The cost of your premiums, deductibles, and copays

• Which doctors are in your network

• What services are and aren't covered

If you’ve lost your health insurance because of job loss or becoming self-employed, your first goal should be to make sure you continue your health insurance coverage. Your options include COBRA, Medicaid, or the Affordable Care Act Marketplace. Skipping health insurance is risky. One medical event could leave you with medical debt to pay off, making a mess of your savings and financial goals.

It’s also smart to make sure you have the right auto and homeowners insurance. Check your coverage on both to make sure there aren’t any gaps. You might be able to bundle your auto and homeowners insurance for potential savings.

If someone depends on you financially, it’s smart to have life insurance. Term policies are typically much cheaper than whole life or universal life insurance. 

Reduce large expenses 

Housing is probably your largest monthly expense. If you’re having a hard time keeping up, consider renting out part of your space. You could rent out a room or even just your garage.

Transportation may be another large expense of yours. If you have a car payment, consider selling your car and buying something you can afford with no loan. 

Pay the right amount of tax

If you’re wondering how to organize your finances, one key angle is taxes. Everyone pays them, but maybe you’re having too much withheld from your paycheck. Having tax withheld at too high a rate could mean a smaller paycheck that makes it harder to cover your bills.

It may cost a bit of extra cash, but organizing your finances may benefit from paying for professional advice. If you’ve consistently received large tax refunds in the last few years, you may want to talk to an accountant and ask if you should adjust your tax withholding at work so your take-home pay is more generous. The IRS also has a free withholding calculator that helps you figure out the right amount. 

It’s also a good idea to make sure you’re paying enough taxes if you’re self-employed or do gig work on the side. Be sure to make estimated tax payments each quarter so you don’t wind up with a tax bill. The IRS has set a threshold of earnings you have to report for 2025 that’s just $2,500. 

Review your childcare expenses

Childcare takes a big bite out of most people’s budget. If you’re struggling to keep up with childcare costs:

• Speak to your employer. Your employer may have childcare assistance programs or offer discounts on care. If they don’t, they may allow you to adjust your hours so you need less childcare. 

• Shop around for childcare centers. Some childcare centers offer sibling discounts or payment plans. They may also consider your income and provide you with a more affordable rate.

• Consider Dependent Care FSA Accounts. You might be able to use pre-tax dollars for child care expenses using a Dependent Care FSA Account. Find out if your employer offers this perk.

• Think about nanny or babysitter sharing. Sharing a nanny or babysitter with another family could cut down on costs for both of you.

Take control of your debt

Taking control of your debt is a big part of organizing your finances. If you’re juggling multiple loans and credit card balances, it could pay to explore your options for debt relief.

One option is debt consolidation, where you move multiple balances into a single new loan, typically a personal or home equity loan. You can also consolidate debt with a balance transfer credit card. These typically offer low or zero interest for 6-18 months, depending on the card. Debt consolidation has two benefits:

• You’ll have fewer payments to make each month. 

• You may be able to lower the interest rate on your debt.

Debt settlement is another option if you’re struggling to keep up with your debts. Professionals in a debt settlement company negotiate with your creditors on your behalf to pay off your debt for less than the original amount owed.