Step #4: Be systematic.

Have a plan for processing all paper. Pick a spot in your information area where you'll put the bills— say, a manila envelope, a drawer, or a plastic in-box or sorter— and toss in each envelope as it arrives in the mail. Then, when you sit down to write those checks each month, you'll have all the paperwork you need in one spot.

Now here's the key: Once you've paid the bill or checked the statement, file it immediately. "Your goal should be to touch a piece of paper as few times as possible, rather than shuffling it from pile to pile," says Paula Boyer Kennedy, a financial planner in the Minneapolis office of Ernst & Young. "If you stick the bill back in the drawer after you pay it, it will find friends, and they will mate and produce offspring. Pretty soon, you'll have a true litter."

Again, a very rudimentary filing system is all you need. The simplest method is to throw everything that is tax-related into a single receptacle as soon as you're done with it— a drawer, a file cabinet, a paper accordion file, or even a shoebox will do. That way, when you're ready to fill out your tax return, you'll have all the paperwork you need at your fingertips. Alternatively, you can set up a slightly more organized system at the outset, with separate file folders for the major categories of your life. You might, for example, label your folders by the type of account (credit-card statements, brokerage statements, utility bills, etc.) or by tax category (deductible business expenses, charitable contributions, and so on) or by financial goal (housing, retirement, college fund, etc.). This may take more time initially, but, in the long run, it will save time.

Step #5: Tackle the backlog.

Once you have a system in place, you still have to deal with all the piles you've already accumulated. Instead of launching a massive reorganization— a task so daunting that few people will take it on— start by sorting through a small stack at a time. You can allot half an hour a day to sift through old papers, perhaps while watching the news or listening to music.

You'll be amazed at the difference a little organization makes. "People don't realize how much they pay as a result of having their financial papers in disarray— a late credit-card charge here, a lost tax deduction there," says Stephanie Denton, a professional organizer in Cincinnati. Even greater, though, may be the long-term psychic and financial benefits. Once you're organized, "you can focus your mental energy on the really important stuff, like your investments and your financial goals," says Terry Savage, author of The Savage Truth On Money ($15, www.amazon.com). "Getting your financial papers in order pays big dividends in peace of mind."