Many New Year resolutions are usually broken before Punxsutawney Phil has left his burrow on Groundhog Day. This is not horrible because some of them have nothing but a miserable year ahead if followed through with.  A resolution to get you out of financial troubles, however, cannot be thrown onto the back burner.

The cost of rising expenses

As expenses keep growing, wages are at an all-time low, and you are lucky if you are not suffocating under the weight of debt.  At least 80% of US adults today are, making financial dreams that much harder to achieve. Saving money is no longer a good idea but a critical resolution that needs a life-change to succeed.

If you have backtracked on your beginning-of-the-year resolutions, you can get back on track and end the year with a bang financially. Just like spring cleaning, scrubbing out those financial closets is awful, but the end results are fantastic. All it takes are little things that often add up to great financial success months down the line.  

Steps to Better Financial Health

Take an inventory of your financial closet

To set your compass to the right direction, you, first of all, need to know exactly where you are. Review your debts, their interest rates, monthly payments, budgets, utility bill payments, etc., as well as savings.

Your analysis should assist you in identifying your problem areas, setting goals and resetting your budget if you have had one.

Track down your expenses  

When it comes to monthly bills, subscriptions, and membership accounts most people have no idea just how much they fork out each month or if it is even worth the costs. Your cell phone package, Netflix, Hulu, or Amazon Prime accounts should have to give you a good reason to continue with them. Tracking down these expenses will highlight those tough choices you need to make in order to nurse your finances back into good health.  

As uncomfortable as it may get, dig deep and shine a light on the potential problems. Start by tracking your payments over a month. It’s a chore, but very much worth the effort. Here you will catch those evil gremlins using up your savings.

Once you have a clear picture of your expenses, itemize those must-have annual expenses like property and sewer taxes, education expenses, and car, and health insurance. You should then  key them in as monthly costs.

Set financial goals

There is no known magic wand for handling personal financial problems but planning for your money will set you on that road to economic freedom. A good plan should encompass a budget, a get-out-of-debt plan, and a spending plan.

The point of a plan is to help free up cash after debt payments, which will help you achieve your financial goals. Once all your goals are down on paper or in an app, prioritize them, keeping a close eye on those most important to you.  

Start off by setting your long-term goals. Long-term goals include mortgages, retirement, and eliminating debt plans. Once you have your long-term goals set, tackle your short-term goals. Lay down your budget in stone and get rid of your credit cards. Plan to decrease spending by cutting out those expenses that you can do without.

With both your long-term and short-term financial goals at hand, go through your lists and prioritize them for your final plan.


Budgets are the backbone of personal finance mastery. It’s sad to say, but statistics show that only 41% of US adults budget for their finances.  With a budget in place, you can engage a spending plan that directs your money to your short-term and long-term goals. Without it, your money targets will continue to move, and you will never hit them.  

Keep your expenses below your income and make room for debt repayment and savings.
Budgets cut out unnecessary spending since spending is more natural than saving. Never get your budget off track once you are out of debt. Direct any extra money to your short and long-term goals.

Have long-term goal savings

Retirement is one of those long-term savings goals you should not relax about. Besides contributing to your employer-sponsored programs, set up your own IRA. Max out your contributions by adding an incremental 1% per month each quarter so that you can soon achieve contribution limits.

Have an emergency fund

A good emergency fund should have at least 3-6 months worth of your essential day-to-day expenses.  Over 61% of Americans do not have a proper emergency fund, leaving them susceptible to debt when that rainy day dawns. This fund will buffer your financial plan against emergencies and keep you from drowning in debt when the unexpected happens.
To help you maintain an emergency fund, set an automatic transfer of your emergency funds from checking to savings and rest with the peace of mind that comes with financial security.

Be accountable

Share your goals with a person who is on the same journey as you are. A person who has overcome the financial challenges you are in could offer great support and encouragement, too. They will give you a pat on the back when you keep to your plan and motivate you when you want to cave in and buy more shoes.

Clean up your credit report and up your score

Review your credit report to ensure that there are no inaccuracies. There are three major agencies available for this task, and you should check in a few times annually. Watch for fluctuations in your credit score. A high score will place you in a better position credit-wise and entitle you to better interest rates on $5000 loans and credit cards, too.

This will eventually translate to less spending on interest payments and having more cash in your pockets.

Have a debt elimination plan

Credit card debt falls into the bad debt category because the interest rates grow exponentially over time. Bad debt has neither appreciation rates nor tax benefits. Pay all your debt back by including debt repayment as per of your monthly budget. It may be a drag, but once paid, you will get your finances back in shape.

The easiest way to pay back debt is to focus your payments on one debt at a time. Once done with one debt, move on the next one for a ‘snowball effect,’ which will lead to financial freedom.  Once out debt, commit yourself to staying out. Keep your credit cards aside and automate your recurring payments.

Final word

You might not manage to make all nine of these steps before the end of the year, but do try to make a few of them before the holiday season sets in. They will assist you in avoiding unplanned holiday spending that leaves many households walking the financial tightrope for months on end afterwards.

The very first step will set you up for financial wellness come next year and give you the confidence you need to see your New Year resolutions through.

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Blast is Boston's Online Magazine

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