It’s a new year and that can mean a lot of things. For those of us in New England, January means cold weather. But on the bright side, it also means making chili, snow skiing (my favorite!), and watching all of the best picture nominations. And most importantly, to me, January means starting fresh. I can start the year with a renewed sense achieving my financial goals and making a plan to achieve them.

Let’s Get Started 2016 means starting renewed and finding financial wellness. You can do this by setting your financial foundation. I do this every January and it helps me understand where my money is going and what habits I need to change or what goals I should consider. To help you get started, follow these five steps. These steps are intended to leave you with a foundation and guide your money decisions throughout the year.

Step #1: Organize your accounts: Gather current statements for all of your checking, savings, brokerage, retirement, and any other asset account, as well as your debts. This includes credit cards, student loans, and home loans. Add up the assets and the liabilities. This simple exercise is so important to getting yourself organized. You may already have an online tool that is gathering these things, and that works too! We are looking for a financial snapshot in time.

Step #2: Check your credit report. You want to look for any discrepancies in the reporting of your credit accounts, ie: credit cards. If you see something that doesn’t look right, contact the credit reporting company and the company that is the source of the information. If your credit report isn’t correct, we want to be on top of that sooner rather than later.

Step #3: Track your spending for one month and break it down into three categories:

  •         Fixed expenses
  •         Variable spending: entertainment, dining out, personal care
  •         Savings goals that you contribute to regularly (for example, you might have $100 going into your savings account every paycheck)

Now that you know where your money is going, are you making enough to cover the monthly spending?

Step #4: Calculate your monthly take-home pay. Do you get paid monthly, every two weeks? Is it fixed or variable?

Step #5: Calculate your monthly surplus or deficit. If you find a monthly surplus, you know that you have room to create a new savings goal, pay down that credit card listed in Step #1, or splurge a little for your wife’s birthday next month. On that other hand, if you see a monthly deficit, we need to make adjustments: spend less or make more. Refer back to your spending and think about where you can cut. Alternatively, do you have a hobby that you can turn into cash? Or maybe your schedule allows for a part-time job in the evenings or on the weekends. Whatever you choose, we want income to be equal to, or greater than, spending.

Remember that you can start fresh in 2016. These five foundational steps will help YOU Get Started on the path to financial wellness.

Now, stay warm out there!