As we are nearing the New Year, we wanted to touch on another set of goals that are common come January 1st. Money goals. Whether it be paying off student loans, additional debt, saving for a home, or paying your way through college – the new year is a great time to evaluate and make a plan with your current situation. Check it out.

Determine What Your Goals Are

When you’re aiming to reach any financial goal – it’s important to understand what they consist of. Maybe your goal is to save or to pay off debt, maybe you have a goal to go to college and pay for it out of pocket, maybe you want to develop and start a business and pay your way through. The first step is to determine what your money goals are before you can begin.

Review Your Spending

Once you determine what your money goals are – it’s time to evaluate your spending. It’s not just about how much money you make – but on what and where your spending. Carve out some time to assess your bank statements. Pull up or print out the previous full month of spending and log where your money is going. Figure out how much you’re spending on necessities, such as bills, rent/mortgage, etc., then all other spendings, such as groceries, gas, fun money, etc. This will give you a strong idea of your habits. If you’re looking for more accurate numbers – take the last three months and average those together. Then decide where you can reduce spending, and where you can make cuts.

Evaluate Your Bills, Payments, and Subscriptions

After you review where all your money has been going – it’s time to take inventory and make some changes for where the future money will go. Do you have a handful of monthly subscriptions that you are not using or don’t need? For example, clothing subscriptions, magazines, dog box subscriptions, meal subscriptions, or any of the sort? Are you spending money on a membership you’re not using? Have you been paying for the gym and barely frequent? Review these commitments you’ve made, and make cuts when possible. Can you make cable cuts, streaming network cuts, etc? This is the hidden category that tends to get overlooked.

Create A Budget, and Stick to It

Once you review your spending and make cuts where you need to – it’s time to create a budget. Determine what you’re bringing in per paycheck, and develop your budget from there. Include all the necessities – and establish numbers that are modest, yet doable. For example, what can you realistically spend on groceries, gas, spending? For help or ideas creating your budget, check out this step-by-step plan, here.

One Word: CASH

One of the best pieces of advice when it comes to your personal finances is using cash – as often as you can. Especially with spending that you need most monitoring. There is a study that has been done that explains that spending cash, creates more emotion.

Automate Necessities

For payments that are a frequent occurrence, set up auto-pay (if possible). This will not only save time, but it will also ensure that you’re up to date and paying bills on time. That way when you create your budget, you know what date your bill is due – and are prepared to pay it.

Start with Your Savings Account

After you’re current and up to date with all monthly payments, per Dave Ramsey – a well-known financial coach who has led and taught millions in getting out of debt and building wealth – suggests starting with saving $1,000 dollars (or what is known as your temporary mini emergency fund). For further details on starting your mini emergency fund, click here.

Throw All Extra Money to Debt – And Avoid it at All Costs

Your “largest wealth-building” tool is your income. Ramsey suggests after you have saved a mini emergency fund of $1000, you should throw any leftover money at the end of each pay period – to debt. If your income is being tied up in monthly payments – you are not able to utilize that money to its fullest. He suggests listing them from smallest to largest and following the “Debt snowball” method that you can learn, here.

What do you do with gift money, money from selling objects in the household, or overtime money? You guessed it – debt. Any additional money that comes your way – can speed up that process. It may be frustrating to put that money towards debt and not buy yourself say, that new desk. But once you’re out of debt – you can budget and save for any of those purchases more easily in the future.

Go on A Spending Freeze

If you decide that you want to speed up the process even further, you can follow what is called a “Spending Freeze”. A Spending Freeze is a period of time where you cut any spending. When you leave the house, you don’t bring your wallet – and you make no purchases. Whether it be for the weekend or 7-days, some people even try to do full month (with the obvious necessities, groceries, gas, etc.) and then whatever money is saved from that spending freeze – throw to debt.

Delay Gratification

In more way than one. For non-essential spending – give yourself time to save up for them. Let’s say you want to buy something that is $100 that is a want but not necessarily a need. If you save $10/week for 10 weeks – at week 10 you can buy that said item. By then you can decide the priority of that item. This will also reduce the chances of impulse buying. If you wait to buy things you don’t need – you have time to evaluate if it’s worth the spending.

Review Your Career/ Get a Side Hustle

If you have gotten this far, and you are finding that you are still struggling to even create a budget because your income is not enough to support you – it’s time to re-evaluate. Are you able to work overtime to bring in more money? Could you get another position doing similar responsibilities with a more realistic salary? Maybe if you picked up a part-time job you would have all the extra income you would need to get ahead. Or maybe you start a side hustle like “49% of Americans under age 35” has. You are in control of your income and how much you bring in. Make those adjustments if need be.

Re-evaluate Your Work Benefits

What do your work benefits look like? Are you paying out of pocket for full health insurance? Do you have a 401k available through your employer? If you are paying a decent amount out of pocket to insurance, that drastically affects your income – it may be time to have a conversation with your employer on your options or maybe time to make a change.

Dive into Finance Education

One of the most surefire ways to ensure that you stay on track with your financial goals is to consume financial advice, and education. For example, reading finance books, listening to podcasts and consuming finance blogs that help keep your money goals at the forefront of your mind. Better yet – to educate yourself on other money-related aspects so you’re prepared to make an educated decision when it comes.