The best way to start a new year is intentionally. That means looking back on the last year, and looking forward to the year ahead, and asking yourself how you want to live. That’s a great idea in theory, but doesn’t always play out in real life in any meaningful way. So, here are four PRACTICAL things you can do in the month of January to make sure you’re ready for 2019.  Financially, anyway.

  1.  Examine Your Savings and Debt Reduction Goals

New Year, New You, right? Even though sometimes it feels like the only special thing about a new year is buying a new calendar, every January can be a great time to reassess your goals and priorities for the coming year! And that should include your finances and spending habits. Now is the perfect time to take a look at your savings and debt reduction goals. Examine what worked and what didn’t in the last year, and make the necessary adjustments. A portion of every dollar you make should go towards paying down debt and building up savings. And whether or not that was true last year, now’s the time to either make sure you’re on the right track or reset and get closer to where you need to be!

  1. Adjust Your Budget

This is for those who made a budget for 2016. If you didn’t, then change this section to MAKE A BUDGET. The Dallas Federal Reserve provides some great tips for budgeting through their “Building Wealth” toolkit.

If you DID make a budget for 2017, it probably wasn’t perfect. That’s fine! Budgets never are, but a new year means a fresh start! Every year brings unexpected expenses and surprises. That’s just how it goes, and budgets need to be adjusted accordingly. Maybe you over- or under-budgeted for something, or wish you had left more flexibility in your spending habits. However your budget shook out in 2018, the beginning of 2019 is the perfect time to reassess and adjust. Take a look at what worked and what didn’t, and what you want to prioritize in the coming year. Budgeting is the perfect opportunity to ask yourself what’s important, and how you want to spend your time, energy, and money!

  1. Add to Your Emergency Fund

Budgeting is smart and important! But sometimes life comes at you fast, and you can’t account for every circumstance you will encounter in a year. That can be anything from a sudden job loss to a big medical bill. That’s why every budget should come with an emergency fund, enough savings built up to have a buffer in case of a sudden change in finances. Dave Ramsey recommends that any financial plan have 3-6 months of emergency funds built into it. That’s a great goal to set, but sometimes it’s not immediately achievable. Plus, even if you have six months of savings built up, it never hurts to build on that, just in case. That’s why the beginning of the year is a perfect time to begin prioritizing that fund. As the year goes on, spending habits become more and more ingrained, and every dollar is accounted for by this bill or that expense. Setting aside some of that now guarantees that you’ll be able to maintain that priority later on, and hopefully you won’t need to tap that fund this year!

  1. Review Your Credit Report

Having good credit is essential. A bad credit report can affect your ability to buy a house or a car, or how much interest you are required to pay on a loan or mortgage. That’s why checking your credit report (which you’re entitled to three times a year for free), is so important. Checking at the beginning of the year and working to improve the negative aspects of a weak score throughout the year can be hugely useful in building up good credit.

The idea of getting your finances on track can be daunting. So many of our spending habits and priorities are just a reflection of the responsibilities and obligations we have in daily life. We can feel tied to the way we handle our money, simply because that’s the way we’ve done it until now. But better habits and choices at the beginning of the year can dramatically alter the way we feel, think, and act with our money. Start this year the right way!