How to Reset and Manage Your Finances for the New Year

Do you set goals for the new year? Most people decide they’re going to get into shape, stop a bad habit or to spend less and save more. Unfortunately, by the middle of the year, most will find themselves hopefully off track on those goals they were so set on reaching. When this happens, you will often find yourself mentally exhausted, stressed and if the goal you didn’t meet was financial; struggling with an empty bank account. The good news is that learning how to reset and manage your finances for the new year and a new start is not as overwhelming as you likely think it is.

The first step to resetting your finances is to take stock of your finances. You will need to do a complete bank account audit to find where your money is being spent, where you’ve over spent and what payments you’re making that could be lowered or stopped altogether. Ideally you’ll want to track six months into the past at a minimum but if that isn’t possible, aim for at least three.

The next step is to track your income. Don’t forget to account for any income source that pays you including child support and/or alimony. Total up your income and subtract your expenses from it. This is the total amount of money you should be saving each month. If you are not, you are having a significant financial issue.

Most financial issues stem from one of two things. Either you simply do not have enough income or you are spending far too much money. Again, if you have a spending issue, take a second look at where your money is being spent. Chances are good that you still have expenses there that can be removed.

If the issue is that you do not have enough income, the only recourse to fix this is to find more income. There are several ways you can do this including starting a side hustle or joining a site like Swagbucks where you can make money by filling in surveys or carrying out tasks. By bringing in more income, you give yourself a small amount of wiggle room that you will be thankful you have when you reset your finances.

Once you know where you are having issues, it’s time to reset them. Start by cancelling any subscriptions that you no longer need or have forgotten about. These are especially important to take care of since they are generally recurring payments.

Next, take care of any high utility bills. Call each company and see if they are willing to negotiate your rates. Check for discounts that may apply to you as well. Often there are discounts available for those households but they are rarely advertised. If they will not negotiate with you, don’t be too concerned. Their goal is to make money; not to help their customers.

If you are behind on your bills, this is the time to set up payment plans that can help you get current. Ideally, you should do this as soon as you realize it’s needed and as far from the new year as possible, but better late than never. A payment arrangement may not seem like it’s resetting your finances but it allows you to get a past due bill current. And that is what you need to do in order to do a full reset.

Next, sit down and finalise your new budget. Be sure you include room for savings. This is especially important if you don’t have an emergency fund. Start with the total amount of income you are receiving and subtract your expenses. Take any amounts that are left over and assign them to go into savings.

Check your budget often. If you still find yourself having an issue, it can be helpful to track every pound you spend. Doing so will help clue you into where you’re still having a spending or an income issue.