I know your dirty secret. I know because I have it too. I'll even go first and fess up:

My name is Dayana, and I have a paperwork problem.

Now that that's out of the way, we can all deal with our piles of shame -- the money-related detritus (those gobs of receipts, bank records, investing statements, warranties, and whatnots) we've been stashing in closets, drawers, and basements for (I admit) years.

Based on the number of decluttering books in the "Get Organized" aisle at the bookstore, there's no shortage of advice on controlling the torrent of items that stack up every day. So let's heed the organizational pros and apply their advice to our financial clutter. For this exercise, I'm using the five steps that author Julie Morgenstern outlines in her popular organization book, Organizing From the Inside Out. Let's give it a go.

Step 1: Sort
Take stock of your financial file cabinet. For a super-fast sort, set a timer for 15 minutes and in that time make three piles of papers:

  1. What you own (house, car, snazzy electronics)
  2. What you owe (credit cards, student loans, mortgage, monthly bills)
  3. What you save (bank accounts, retirement savings, gold doubloons).

Extra credit if you set up a tracking system -- using an oldfangled pencil and paper, a more newfangled system such as Intuit's (Nasdaq: INTU) Quicken or Microsoft's (Nasdaq: MSFT) Money, one of the free financial tracking services we covered recently, or whatever system you'll actually refer to in the future.

Step 2: Purge
Get rid of extraneous stuff. This means everything from 10-year-old phone bills to redundant accounts and services. But make sure it's extraneous -- here's more on which financial statements to trash and which to treasure, for your and Uncle Sam's records.

Nothing cuts down clutter more than getting fewer account statements in the mail. But even if the accounts are digital, you still have to deal with them. For example, consider consolidating your old 401(k) accounts into a single self-directed IRA. If you're married, assess the costs and convenience of any separate accounts you have. If you can, couple up and save some cash! Cover your cars on one policy and see whether you get a price break on homeowner's insurance or renter's insurance with the same company.

Taking the time to simplify your financial life now will score you hours and hours of free time to waste in front of the TV in the future.

Step 3: Assign a home
In household organization, the items you use frequently are stored at the front of the closet. (No, on the floor near the closet doesn't count.) Stuff you use less often goes into the attic (or mysteriously disappears while you're out shopping and reappears later at a neighbor's garage sale).

The same principle applies to organizing financial records. Short-term financial obligations -- monthly bills, savings for a vacation or a new pool -- should sit in the forefront of your mind and your filing cabinet. Paperwork for accounts accessed less frequently -- your emergency savings account, retirement savings, kids' college fund -- can be filed in the second drawer, as can things like warranties and receipts for large purchases.

Put the most recent statements in the front of the folder and put a tab on any folder that contains items you'll need to access to do your taxes. This will likely be the step that takes the most time, but take it from a procrastinator -- once it's done, it's eerily, immensely satisfying.

Step 4: Containerize
Now that you've gotten rid of extraneous accounts and assessed what needs regular attention, it's time to find the best place to "store" money you don't need to get to frequently. (I recognize that in the decluttering books, "containerize" refers to actual containers, but bear with me while I stretch this analogy as far as I can.)

The goal for your long-term savings is to make it grow. If you've got five years or longer (depending on your risk tolerance), there's no better place for growth than the stock market. Let your employer lend a hand. Your work retirement plan (401(k), 403(b)) is the perfect place to start, particularly if your boss offers to match any portion of your contribution.

An IRA is another vessel for long-term savings tasks, and all you need to get started is a discount brokerage account. Give your future self a raise starting today by maxing out both of these important accounts. (Heck, give yourself a raise and double your salary in 10 years with our tips.)

Your short-term savings -- what you plan to spend within about five years on a new roof, new car, or a major vacation -- should be put in a money market account, CD, or even short-term bonds. Your peace-of-mind money -- for medical emergencies, car repair emergencies, pink-slip emergencies -- should be easily accessible (but not too easily). For this purpose, consider a high-yield savings account (often a money market account) with check-writing privileges.

Step 5: Equalize
When you've tamed the paper beast and achieved a chipper state of financial being, work a little every day to exercise your newly centered, hyperorganized status. You can simplify your system through automation. Online banking/bill paying allows you to automate your monthly money management. (This isn't an excuse to stop reviewing bills, though, unless you enjoy nasty surprises like new fees, changed due dates, and negative opt-out services added to your tab.)

Your payroll department makes regular retirement savings a snap by automating your contributions from every paycheck. You set up the same system for yourself by designating monthly amounts to be ported into your IRA and other savings accounts.

Finally, when the bills, bank statements, receipts, and garage sale proceeds come in, review Steps 1 to 4 and lather, rinse, repeat.

More simple steps for taming money clutter from The Motley Fool:

Despite the piles on her desk, Motley Fool consumer finance expert Dayana Yochim insists she has a system for handling paperwork. She has no financial interest in any of the companies mentioned in this article, although she swears some of them have been eyeing her lately. Microsoft is an Inside Value recommendation. The Fool has a disclosure policy.