The start of a new year is a great time to start over financially and create a new financial plan that is better aligned with your financial goals for the year. The financial needs that you had in 2022 may not be the same financial needs that you need to focus on this year and last year’s financial plan will need to be adapted to reflect your changing circumstances. Fortunately, it is not difficult to start over financially with a new plan if you follow these simple steps.
Step 1 – Assess Your Financial Situation
The first step in your journey to start over financially is to assess your current financial situation to determine how much money you have coming in and how much money you have going out in fixed expenses. Your overall financial situation may have changed if you switched jobs or received a promotion that affected your pay, the amount of your bills has changed or new accounts have been opened, or if any changes have occurred to your household. Taking these changes into account will give you a good foundation for your new financial plan.
Step 2 – Figure Out Your Financial Goals
The next step in starting over financially is figuring out what your financial goals will be for the new year. For some, the goal will be to save more money. For others, the goals may be to pay off debt or make a particular purchase. Some people will have multiple goals that they will be working towards while others will choose to focus on a single goal that they deem most important. Whatever your goals may be, you will need to have a realistic estimate of how much money it will take to accomplish those goals for your new financial plan to have any chance of success.
Step 3 – Create A Financial Plan
Next is the task of creating a financial plan that you can use to reach your goals. Look at what you are spending your money on and see if any expenses can be cut to help you reach your financial goals faster. Determine whether you can reasonably reach your financial goals on your current income or if you will need to find additional money sources to make your goals become a reality. Don’t fret about your plan being perfect – it can always be tweaked throughout the year to better reflect your needs.
Step 4 – Automate As Much Of Your Plan As Possible
To get your plan to start over financially off on the right foot, automate as much of your plan as possible so you do not have to keep thinking about every little step. If you have the ability to automate your bills, set them on recurring payments so they are never paid late and you never incur a late fee. If you have the ability to split your paycheck deposit, divert part of your paycheck directly into your savings account so the money you are trying to save is never in your spendable funds. Most banks make it easy to set up recurring payments and automatic savings, so check out what your account offers to see if these features are available to you.
Toi Williams began her writing career in 2003 as a copywriter and editor and has authored hundreds of articles on numerous topics for a wide variety of companies. During her professional experience in the fields of Finance, Real Estate, and Law, she has obtained a broad understanding of these industries and brings this knowledge to her work as a writer.