These 4 Moves in January Could Set You Up for a Year of Success

We all have our share of New Year’s resolutions we want to keep during 2021 — shed some pounds, get into a solid exercise routine, and, of course, save money. But while you’ll need to watch your diet continuously and keep up with your fitness regimen to achieve the first two, a few key moves in January could help you achieve that last goal. Here are four specific action items to focus on during the first month of the year.

1. Set up a budget

The sooner you get on a budget, the easier it’ll be to track your spending and find ways to cut back on expenses, so don’t delay — make that budget one of the first things you tackle in 2021. To do so, comb through your bank and credit card statements from the past year to see what your expenses looked like and how much each one cost. Then, list them on a spreadsheet or use a budgeting app to get yourself going. Once that information is in front of you, you’ll be able to identify meaningful ways to reduce your spending.

2. Cut down on one expense

It’s unrealistic to think you’ll be able to lower every single expense in your budget. But what you can do is choose one specific expense to reduce. Maybe you’ll dine out and order food delivery less frequently. Maybe you’ll cancel your cable plan and deal with a streaming service that gives you fewer options but costs a lot less. (Hey, it’s a good excuse to read rather than just watch movies and TV). Of course, the more expenses you can slash, the better, but in January, start with just one and plan to work your way up when you can.

3. Automate your savings

It’s hard to spend money you don’t actually see. If your goal is to close out 2021 wealthier than when you started, set up an automatic transfer from your checking account to your savings account every month so that some money is stashed away off the bat. That sum can be $20, $50, $100 — whatever you can afford. The key, however, is to get into the habit of saving consistently, while removing the option to overspend to at least some degree.

4. Create a debt payoff plan

A lot of people will be entering 2021 with some amount of debt. Maybe you can blame yours on the holidays, or the fact that your hours at work got reduced due to the pandemic. Either way, if you’ve racked up some debt, figure out what it’ll take to pay it off quickly. Perhaps you’ll need to shave $250 a month off your budget. Or maybe you’ll need to get a side job because there isn’t enough wiggle room in your budget to make cuts that will meet your goal. The point, however, is to figure out what it’ll take to close out the year debt free.

At the same time, you should aim to pay off your debt as efficiently as possible. That could mean doing a balance transfer to lower the interest rate on your debt or consolidating it with a home equity or personal loan.

Set yourself up for the win

The more effort you make in January to get your financial house in order, the more successful you’re likely to be in the course of the year. After a harrowing 2020, many people are looking forward to an emotional and financial recovery in 2021, and if you play your cards right in January, there’s a good chance you’ll be set to achieve the latter.

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