New Years are like new beginnings. Make sure you have a plan.

This article is part of an M-Network group writing project, the 12 Days of Christmas – Personal Finance Style. Last year, the M-Network changed the lyrics to the popular Christmas song to give them a financial twist. This year, we are at it again. Links to the previous Days of Christmas are located at the end of this article; this is the Twelfth Day of Christmas.

As the year draws to a close, it’s natural to start looking ahead and planning for the new year. Some people make resolutions; others set goals. Regardless of your preference, making a plan for next year can help you achieve your financial goals. Here are a few rules to get you started.

1. Face the Facts

If you have no idea where you stand financially, now is the time to face the facts. Write down all your debt. Add it up. It might be scary, but as Dr. Phil says, “You can’t change what you won’t acknowledge.” Look at your debt vs. your income. You owe yourself some honesty. And once you know the facts, you can make a plan to change your situation.

2. Spend Less Than You Earn

Make a commitment right now to spend less than you earn. That is the only way to get yourself on sure financial footing. If you have a problem running up a balance on credit cards when you run out of money, stop using the cards. Cut them up or freeze them. Just make a commitment to spend less than you earn.

3. Pay Yourself First…or Second

With every paycheck you receive next year, take a little bit off the top for savings. If you’re a Christian and believe in tithing, as I do, pay yourself right after you tithe. But pay yourself before you pay your bills. It’s only through building a comfortable savings account that you can step away from living paycheck to paycheck.

4. Prioritize

Remember that you can have anything you want, but you can’t have everything you want. With savings and persistence, almost any goal is achievable. But if you’re trying to buy a house, take a trip to Italy, be a stay at home mom, and drive a BMW, things might not work out too well. Decide what is most important to you in life, and work on that.

5. Make a Spending Plan

You can’t make any changes without knowing what changes need to be made. If you don’t know where your money is going, you can’t make the changes necessary to improve your financial situation. A budget isn’t restricting. It’s just a plan for your money. If it’s not working for you, change it. But have a plan.

6. Educate Yourself

Wherever you are in your financial situation, learn about the next step. Do you have a great emergency fund, and find yourself ready to begin investing, but don’t know where to begin? Check out books from the library. Read blogs. Meet with a financial professional.

Do you need to cut back your budget? Do the same. We live in a day and age where information is easily available. Use it.

7. Stop Trying to Keep Up With the Jonses

Don’t you know that the Joneses are in debt and living on the edge? Learn to be content where you are. You can strive for more, but don’t live the lifestyle until you have the money to pay cash. You’ll sleep a lot better at night.

8. Give

Giving has a strange and wonderful effect on people. It takes our eyes off our own needs and places them squarely on the needs of others. When we realize that other people are struggling, too, our own situation seems less dire.

If you can’t give financially, volunteer your time. Read to kids in schools. Work in a soup kitchen. Visit the elderly in a retirement home. The possibilities are endless, and everyone has something to give.

9. Reduce Your Waste

Become a conscious consumer. Make sure that you really need the things you buy. Make sure you will use the things you buy. Recycle what you can. By becoming aware of how much you are wasting and trying to reduce it, you naturally start to spend less and use less. It’s better for the environment and your pocketbook.

10. Spend Time With Your Family

If you’re a parent, make sure you take time to spend with your children. Go to the park. Play a board game. Spend time doing free things together. Teach your children that they don’t need to buy everything on their wish list to be fulfilled. Remember that on your deathbed, all the stuff in the world won’t matter, compared to the relationships you had…or didn’t have…with those you love.

11. Give Yourself Permission to Fail

Nobody is perfect. So many resolutions fail each year, because people start out determined to follow their plan…and then they blow it. Go into the year knowing you will blow it in one fashion or another. Expect it. Deal with it. Pick yourself up and move on. Improving your financial situation is not about being perfect. It’s about continually moving in the right direction and learning from your mistakes along the way.

12. Find a Good Support System

If you’re trying not to spend money, don’t hang out every weekend with people who are spending like there’s no tomorrow. Find people who share your values and support each other. If you can’t find anyone in your life, look online. There are blogs like this one where frugal-minded people are constantly sharing ideas. Jump in and participate! There’s always room for more.

Whatever your goals are for next year, make a good plan. As Paidtwice said on the first day of this series, “failure to plan is planning to fail.” You can have a prosperous new year, but it’s not going to just fall into your lap. Figure out what you need to do. Then do it.

And here are the rest of the 12 Days of Christmas – Personal Finance Style from the M-Network

Day 1 – The First Rule Of Personal Finance at Paid Twice
Day 2 – Two Financial Goals – Less Debt, More Income at Cash Money Life
Day 3 – 3 New Year’s Worksheets at Mrs. Micah
Day 4 – 4 ways to be better prepared for Christmas next year at Gather Little By Little
Day 5 – 5 Golden Rules To Follow During The Holiday Season at My Two Dollars
Day 6 – 6 Ways to Give at Moolanomy
Day 7 – 7 Savings Strategies at Being Frugal
Day 8 – 8 Simple Snowflakes at Paid Twice
Day 9 – 9 Year-End Money Moves at Moolanomy
Day 10 – 10 Personal Finance Essentials at Cash Money Life
Day 11 – 11 Ways to Decorate More Frugally at Plonkee Money
Day 12 – 12 Steps to a Prosperous New Year at Being Frugal

Photo by Fr Antune.