The new year will be here before you know it. It’s human nature to want each year to be better than the last, but if you’re going to achieve any major improvements—in your health, money or family life, for instance—there’s no time like right now to lay out a plan for your goals.
Here are a few ways to get a head start on your goals.
1. Decide what needs to change.
Get started by taking stock of your situation now. Where are you now compared with where you want to be? What isn’t working in your financial life today? Are you living paycheck to paycheck? Is student loan debt holding you back from buying a home or investing for retirement? Are you building up debt instead of paying it down?
Those are things you can change over the next year, but it all starts with an honest assessment of what you want to be different. That can take some time to work out, and, if you’re married, you and your spouse need to decide on your priorities together.
2. Play with the numbers.
If you’ve never had a budget before, you probably have no idea where your money is going every month. Over the next couple of weeks, track your spending to see how much is going to necessities like groceries and utilities, and how much is being frittered away on fast food and other nonessentials.
When the new year (and new month) rolls around, you’ll have a good idea how to begin budgeting the basics for your family. Once you’ve had some practice, you can add line items to your budget to help you reach the financial goals you set for yourself in Step 1.
Related: Not familiar with the Baby Steps? Learn more here!
For example, if your goal is to pay off your $2,000 credit card debt, divide that amount by 11 or 12 months (however many remain in the year) and add that number into your budget. In this case, you’d create a budget item for $181.81 in order to reach your goal in 11 months.
3. Look for new ways to make your budget work.
To keep your budget on track, you’ll have to decrease your spending or increase your income by that same amount. You can start thinking about those opportunities now—the more time you have, the more creative you can be.
Tried-and-true spending cuts like brown-bagging your lunch and cutting back on dining out are great places to start. If you’re interested in boosting your income, pizza delivery is one option. But is there something you do already, like a hobby or skill, you can use to make money on the side? If you’re a teacher, you could offer tutoring services. Does everyone rave over your cakes? Why not take some orders and see where it goes?
The possibilities are endless. But the key to making any of this work is to take action! Don’t just talk about how you wish things could change. They won’t, unless you make your plan and follow through on it.
Don’t let another year go by just making ends meet. Start formulating your plan so you can jump in with both feet with the new year!