Begin the New Year by organizing your finances.

1.       Calculate your Net Worth.

Add all your assets (for examples, balances of your savings accounts, your equity in your home, mutual fund, retirement account, your car’s resale value, etc.).  Next, total your debts (for examples, home mortgage, balance of car loan, credit cards, student loans, etc.)  Subtract the total amount of your outstanding debts from the total amount of your assets; this will equal your Net Worth.

2.         Make a monthly budget.

Write down your monthly debts (for examples, rent or house payment, car note, cable, internet, phone bills, etc.).  Add these expense amounts together to calculate a total monthly expenses amount.    Subtract your total expenses amount from your monthly net (take-home) income.  This will produce a monthly surplus, deficit, or break even amount.

3.         Set aside savings each month.

Base your monthly savings amount on a goal or goals (for examples, emergency fund, Christmas purchases near the end of the year, summer vacation, college tuition, retirement, etc).

4.         Check your benefits at work and make sure you’re not leaving any money on the table. 

For example, if your employer offers a 5% match for 5% of your income that you contribute to your retirement account, make sure you are contributing at least 5%.  If you don’t, you forfeit free money amounting to 5% of your income.

5.         Write down your financial goals for the year.

 Categorize the goals into short term (monthly) and long term (by year’s end).  Examples of financial goals may be to save a certain amount of money for an emergency fund, pay off a credit card, or take a class on financial planning.