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10 changes to help reset your finances in the new year

After back-to-back holiday parties, non-stop shopping and hosting, you likely feel drained and need to reset your mindset before heading back to your regular routine. Well, the same goes for your finances.

Take advantage of the first few weeks of January to recover from holiday spending, set your financial goals for the year, consider any financial New Year’s resolutions and get your budget back on track.

Here are some tips to help you reset your finances, and put you on your way to reaching your financial goals this year:

1. Review your spending from last year

Or at the very least, review your spending from the last couple of months. If you racked up more on your credit cards than you can afford to pay back, make a plan to get yourself back on track. Set aside as much from your next few paycheques to pay down as much debt as you can. Then, look for ways to cut back on expenses or increase your income.

Reflect on any financial setbacks you may have had and consider what type of plan you can put in place to prevent them from happening again. It’s equally as important to celebrate any financial successes or wins as well.

2. Create a budget

Reviewing your spending from the previous year is a great exercise to do before creating a budget. It gives you an idea of your expenses, and can help you identify areas where you can reduce spending. While creating a budget might not sound like a fun way to spend your time, it’s vital to helping you reach your financial goals this year. But don’t worry – we’ve got you covered with a step-by-step checklist to help you get started on your budget.

3. Review your investments

Take advantage of a new year ahead to review your investments. Make sure your investments are working for you, and start thinking about the RRSP deadline early. Book an appointment with your financial advisor, and create a plan to make your RRSP contributions before tax season. (you’ll thank yourself for getting this out of the way early).

4. Try a “no spend” challenge

What better way to reset your finances than with a “no spend” challenge. The goal of this challenge is to avoid spending money for a certain amount of time (other than on necessities like rent or food). Start with a 7-day challenge to see how it goes, then work your way up to 14 or even 30 days. Not only will you save money in the process, but you’ll realize how much money you’re really spending on items that aren’t necessary, and you’ll learn to appreciate what you already have.

5. Learn how to say no

A lot of us spend too much money because it’s hard to say no – whether it’s saying no to your children or to friends who want to go out for an expensive dinner. Of course, you shouldn’t say no to everything, but it’s important to set boundaries. Allow yourself two nights a month to go out with friends or family rather than saying yes to every invitation that comes your way. And, if your children are often asking you to buy things, this is the perfect time of year to teach them to appreciate what they already have. Encourage them to enjoy the gifts they received at the holidays instead of buying anything new.

6. Change your attitude about money

Be grateful for your job, income and the money you have. Resolve your issues without shopping. Focus on your financial wins, and don’t get discouraged if you’re not doing as well as you’d like. Reaching your financial goals takes one step at a time.

7. Monitor your credit report

Accessing your credit report for free is easier than it’s ever been. A lot of people don’t even know what impacts their credit, so it’s hard to even know where to begin if you’re interested in improving your credit score. A higher credit score allows you to access credit more easily and qualify for lower interest rates, so it’s an important part of your financial situation.

8. Commit to learning something new about personal finance

Listen to a podcast, read a book or take a free course offered at your local community centre or library. The more you learn about personal finance, the more motivated you’ll be to make real changes in your financial situation.

9. Create a plan to protect your family

If you have a spouse and children, you need to consider them in your financial plan as well. Review your life insurance policy, beneficiaries and wills to ensure they’re still meeting your and your family’s needs in the event that something unexpected happens.

10. Consolidate debt

If paying down debt is on your list of New Year’s resolutions, a debt consolidation loan can help you pay down debt faster and save money on interest charges. Plus, a debt consolidation loan can help simplify your payment schedule making your finances easier to manage.

Small details matter, but don’t forget to look at the bigger picture – a budget, your credit score and your mindset are all small elements that make up your financial situation. When you make a few small changes in different areas of your life, you’ll see a big impact in your financial situation this time next year.

Interested in a loan? Try our free loan quote! In just a few minutes, we’ll tell you how much money you could qualify for and what your payments might be. No obligation and no impact to your credit score.