Money Smarts Blog

There’s nothing magical about New Year’s Day, but starting fresh in the new year can be a pretty powerful notion. Many people start Jan. 1 with resolutions to be financially fit, but few stick to it or know how to put a plan in action. Follow our guide to financial stability in the new year, and ring in 2022 in even greater style.

Start the night before: Skip the fancy party

Getting dressed up to spend the night in a fancy club or restaurant with friends always sounds so glamorous. But, once you get there, the reality is usually that the venue is overcrowded, the drinks are outrageously expensive and it’s hard to get the inundated waiters’ attention, much less some actual food.

In short, it’s rarely as much fun as you thought it would be. Alternatively, spend the night at a quiet (and reasonably priced) restaurant with friends, or invite some people over to yours for a BYOB party. These might be more enjoyable – and affordable – ways to welcome the New Year.

On Jan. 1 (or close to it): Get the whole picture

Take stock of your spending. If you haven’t been keeping a spreadsheet, such as the one we offer here or using an app, such as our Money Management tool in Online Branch or Mint, to track your expenses, now is the time to go back through your bank account and credit card statements. Organize your spending in categories that work for you; perhaps:

• dining and entertainment
• household needs
• groceries
• clothing and shopping
• utilities
• rent/mortgage

Once you determine where and how you’re spending your money, you can decide if you need to cut back and where. Then, after considering your income after taxes, you can create a monthly budget for each category. Don’t forget to include a category for savings and retirement. The day will come when you’re grateful you started now.

April/May: Bring in extra cash

You’ve just started to get the hang of sticking to your budget, and it’s already time to re-evaluate. We know it can be tempting to keep going as you have been, – and maybe that’s exactly what you should do – but now is a good time to take a look at the rest of the financial picture. Do you have student loans you could be paying down faster? Credit card debt that it’s time to pay off in full? No matter the reason, you can find room in your budget. It might be a matter of cutting back somewhere else, or maybe it’s time to look into a side gig.

Take stock of your room and decide if there are a few things you could take to a consignment shop or sell on eBay. If you’re amazing at knitting or making jewelry or woodworking, consider opening an Etsy shop. Graphic designers, writers and editors might consider getting some freelance work. No matter the goal, now is the time to start.

August: Solidify your financial future

Now you’ve hit your stride! You’re sticking to your budget, bringing in some extra money, and paying off your debts. It’s time to kick your new financial savvy into high gear. It might be time to meet with a financial advisor or enroll in a personal finance course to learn how to make the most of the money you’re saving. Consider Udemy’s Personal Finance 101 course or Alison’s Introduction to Managing Your Personal Finance Debts. Both are free.

December: Celebrate!

Congratulations! You’ve made it through a full year of sticking to a budget, bringing in extra cash, saving, paying down your debts and even learning how to maximize your assets for the future. You deserve to go to that glamorous party this year, you know, if you really want to.