It’s a new year and you’re probably thinking about what you can do differently this year to improve your life. Everyone has goals whether they’re personal, professional or financial. Goals that are designed to improve your money situation take a lot of thought and planning. Here’s our suggestion for the top seven steps to meet your financial goals.

1. Spend Less Than Last Year

Just about anyone can accomplish this goal, but it takes a certain mindset to do it. Take a long, hard look at your spending habits by writing down everything you spend money on. Now, make a clear-eyed assessment of which of those things are ‘wants’ and which are ‘needs’. Then shift a couple more expenses to the discretionary spending category. You would be surprised at how much you can leave out of your budget without feeling deprived.

2. Create a Budget

Now that you’ve gotten an idea of where the money goes, start a budget by including all of the bills that have to be paid. This includes mortgage, car payment, school tuition and utilities, as well as items like groceries and gas for the car. Pare down or eliminate optional expenses like dining and entertainment. Budget how much you spend on everything that’s nonessential.

3. Eliminate Your Debt

This goal goes hand-in-glove with spending less and budgeting. Don’t think of it as drudgery and deprivation but as a chance to be creative and thrifty. Eat in more often and, when you do go to a restaurant, take advantage of coupons and specials. How many optional expenses do you have each month that are under $50? You might be surprised at how much you’ll save by making your own cappuccino or doing your own nails. You can also try free online debt calculators to figure out how quickly you could be debt-free.

4. Maintain a Healthy Emergency Fund

Having an emergency fund is one way to avoid credit card debt. Now that you’ve reduced your expenses, make this fund a monthly expense. Open a savings account with $100 and set up an automatic deposit of $100 each month from your chequing account. You shouldn’t feel the bite if you stick to the budget you created. And you won’t have to use the credit card for unexpected car or home repairs.

5. Find Extra Forms of Income

If you’re lucky, you can turn a hobby that you love into a side job to earn some extra money. Are you good at knitting, woodworking, beading or some other craft? The nice thing about a side job is that you’re not relying on it to pay bills, so every penny that comes in from it is a bonus. Set aside some of your profits for materials, and deposit the rest in your emergency fund. Remember that every little bit makes a difference.

6. Get the Entire Family on Board

None of this will work unless both spouses commit to following the new budget. You will both need to agree that there won’t be any exceptions to the spending agreement unless it’s an emergency. Decide together which discretionary expenses are most important to each of you and stick to the plan. Involve the kids in the discussion so they’ll understand why you can’t always spend money the way you’ve done in the past. Ask for their input about expenses that involve them. They’ll cooperate more if they feel like they’re part of the discussion.

7. Set Long-Term Financial Goals

Once you’ve gotten into the groove of making the kinds of choices that save you money, the next step is to work on long-term financial goals. Do you want to own your first home or move up into a larger one? Will your family need a new vehicle in the next few years? Don’t forget to set aside money for your retirement plan as well.

Save Now and Enjoy Life Later

We’re not expecting you to cut out all the fun things in life, just to be more judicious about spending on extras. It can be a fun project for the entire family to come up with ways to do some of the same types of things, only cheaper. Your emergency fund and savings account are two things that will keep you out of debt and make your life easier. It’s worth the effort!

Photo credits: money, budget, goals

Author: Casey C.

I enjoy long walks on the beach...just kidding. Diehard Oilers Fan (#SorryNotSorry). Old Man Millennial.