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Though most new year’s goals revolve around health and wellness, financial health is an important part of that. Unfortunately, most people feel overwhelmed when it comes to their finances, not knowing where to begin or what to do. If you are interested in getting your finances in order this year, this simple list can help get you started.

Know your income.

Believe it or not, most people do not know exactly how much they take home each month. Determining your income is vital to be able to set your financial goals, budget, and adjust as needed, helping to ensure financial stability. Take a moment to figure out just how much you bring home each month (after taxes). If your income is not steady (since it is sales or tips based, or you are a freelancer), do your best to estimate, using your median take home pay from the year prior. It is always best to assume less than more.

Develop a spending plan.

Based on the amount you earn, develop a spending plan to use each month. As a rule of thumb, 50% of your income should be used to cover necessities, and 30% toward wants. Then, the remaining 20% should be used towards savings. If you have outstanding debts (especially those that are not manageable, such as credit cards), you should use the 20% to pay off those debts instead, and then place that money towards savings once your debts are paid. One of the reasons why this budget (developed by Elizabeth Warren and called the 50-30-20 rule) is so popular, is that it provides you with the ability to use your money as you see fit (within reason), without having to watch each and every penny.

See where you can spend less.

By breaking your income and expenses into categories, you can A.) see if you are abiding by the 50/30/20 rule and then B.) determine where you can lower your costs each month. For example, if your current housing situation doesn’t meet your space needs, you may have considered moving into a larger home or apartment (which you now realize you cannot afford). Space is a genuine issue (you have loads of sports equipment and camping gear) so you really do need to figure out a solution. To stay within your budget, you can rent a local self storage unit, which is a far more affordable option each month than moving, keeping your necessary spending within the 50% range!

Determine how to earn some extra cash.

If you are interested in earning some extra cash to use towards debt or to save some more, there are countless things you can do on your own time, such as ridesharing and delivery, or the sale of used clothing and items. Some people find that selling used items on eBay and Amazon can become such a lucrative side business, they rent a self-storage unit to store their monthly inventory! Once you do earn some extra cash, determine what you will do with it, whether it be a debt snowball or avalanche method, or additional envelope savings!

Be dedicated.

Building wealth and saving towards your financial goals takes time. Be patient, be committed, and be wise, making the best decisions you can with what you have. By understanding your finances and mapping out a plan to tackle and grow them, you will be setting yourself up for financial success in 2021 and beyond! In the words of famous American tennis player Arthur Ashe, “Start where you are. Use what you have. Do what you can.”