The New Year is a time of renewal and working toward personal goals, and it’s also an ideal occasion to make some moves to improve your financial life. One of the best things to do for your financial life this year is to start a budget.

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Here are a few easy tips for how to start a budget and move forward into the New Year with a stronger financial foundation:

Look back at last year’s money trends.

How did you feel about your overall personal finance performance in the previous year? Did you save enough money? Spend too much? Rack up too much credit card debt?

Were your financial struggles related to a temporary setback or a bit of bad luck (unexpected car repairs, medical expenses or a few months of unemployment), or are you spending too much as part of the everyday financial structure of your life?

What do you want to change about your financial life in the year ahead? What are you prepared to sacrifice or do differently over the next 12 months so you can feel better about your money situation this time next year?

Set big, audacious goals.

Turning the calendar to January provides an ideal opportunity to set big, audacious money goals for the year ahead. For example, do you want to…

  • Save 10% of your income for retirement?
  • Pay off $5,000 of credit card debt?
  • Save $3,000 for a vacation?
  • Pay off your student loans?
  • Improve your credit score?
  • Buy a new car?
  • Buy a new house?
  • Move to another country?
  • Take a gap year?

Whatever your financial goals may be, setting some clear objectives now will make these goals more likely to become reality. Dream big! And then make a clear-headed, realistic plan to achieve your financial dreams.

Use budget planning tools.

In a lot of ways, it’s easier than ever to start a budget, because there are so many great tools available to help you track and manage your monthly spending.

For example, Discover offers a variety of easy-to-use online tools to help you manage your money, analyze your spending, pay off credit card debt, get the most out of your savings and more.

There are also tools available from banks and credit card issuers that allow you to set up account alerts to help avoid spending too much.

Make a plan for methodical progress.

Start small and plan to make steady progress toward your goals each month.

Take your year-end goal of saving a certain amount of money and divide that amount by 12 — that’s how much you’ll need to save each month. Or, you can figure out how much you need to save from each paycheck — if you get paid every two weeks, divide your savings goal by 26 biweekly paychecks.

Make a plan to pay off a small amount of debt each month. Whatever your goal is, it will best be accomplished with steady progress and attention to detail. And give yourself some rewards along the way to help keep your momentum going.

Become friends with your budget.

Don’t think of your budget as being a program of self-denial and deprivation.

A budget is an agreement that you make with yourself to get what you really want most out of your money, instead of losing money to uncontrolled spending and short-term impulsive decisions. It’s about self-control, not self-denial.

You will likely find that, by starting a budget in the New Year, you are setting yourself up for a more relaxed life. Knowing that you’re making progress toward your most important long-term goals can help you enjoy your everyday life along the way even more.

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Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.