5‐steps to organizing personal finances

Photo of resources needed for organizing personal finances.

If something happened to you tomorrow, are your loved ones prepared to handle your finances? Would they have to spend days sorting through and tracking down information in a frenzy?

Organizing and outlining your personal finances—regardless of your life stage—is an act of love and consideration toward the people who matter most.

“Losing someone is hard enough,” says Jenny Smith, financial advisor at Principal. “Organization allows them to deal with grief rather than chaos.”  

We get it. Planning for emergency or death isn’t fun to think about. So make it quick with our 5-step plan.

What you’ll need:

  • Portable file box
  • Manila folders
  • Folder labels
  • Pen or marker
  • Account numbers and contacts

Step 1: Gather important documents.

Use our downloadable estate planning sheet (PDF) as a guide. Think about what accounts will need to be closed, retirement benefits claimed, property titles removed, things like that. Curious what action loved ones need to take after a death? Review our survivor’s checklist (PDF).

Step 2: Write it down.

Document all account numbers, phone numbers, and special instructions using the planning sheet from step one. Never assume family members know who to call or what information they’ll need. Put yourself in their shoes. For example, what documentation will they need to receive a life insurance payout? Who should they call? Thinking through each scenario now helps eliminate the guesswork for loved ones in the future.

When his father passed away from cancer, Eric Foll, senior investment writer at Principal, was thankful for a neatly organized blue folder left in the basement. “He had done enough work that we were able to take care of all the financial entanglements in a couple of hours,” Foll says. “We didn’t have to put much thought to it.”

Step 3: Designate folders.

Choose a color for each section of your filing system. Suggested categories: financial management, investments and retirement, insurance policies, personal documents, and legacy. 

Step 4: Start stuffing.

Place papers in their appropriate folders. Avoid clutter—store only what’s needed. For example, you don’t need every monthly 401k statement from the past 3 years. The most recent month will do.

Step 5: Store and inform.

Stow your files somewhere secure, such as a fireproof safe or safe-deposit box*. Tell two people you trust where to find it or leave that information with your financial professional. Take time at least once a year to review and update information.

Need some inspiration? Watch our simple how-to video.

Money management apps

Even the best organizational method will fail if you don't utilize it. Not a paper person? Try a digital tool. Play around to see which one best suits your needs. Some common personal finance apps are Mint, YNAB (You Need a Budget), and Quicken.

Check out our fillable estate planning sheet (PDF) to help organize important documents and information.

*Safe‐deposit boxes may be sealed until after the owner’s funeral, so be cautious about what you store in them.

Insurance products issued by Principal National Life Insurance Co. (except in NY) and Principal Life Insurance Co. Securities and advisory products offered through Principal Securities, Inc., 800-247-1737, Member SIPC. Principal National, Principal Life and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392. Jenny Smith, Principal National and Principal Life Financial Representative, Principal Securities Registered Representative, Financial Advisor. Mint, YNAB, and Quicken are not affiliates of any company of the Principal Financial Group®.