With the holidays coming to a close, it’s time to start thinking about 2024. Key to having a happy and harmonious year is getting your finances in order and setting some financial goals. Follow these steps to help your financial life run as smoothly as possible over the next twelve months.

Get the big picture

A good way to begin is to take a close look at your finances and calculate your net worth, which is essentially what you own minus what you owe. You can determine this figure by adding up the financial worth of all your assets, including your cash, the value of your home and car, your savings, your investments, and any retirement accounts, such as a 401(k). Then subtract anything that you owe, like your mortgage, car loan, and credit card debt. Knowing your net worth will provide a useful snapshot of your current financial circumstances.

Calculate your spending

You’ll also want to look at your recurrent monthly spending, so determine what you pay for necessities like groceries and your rent or mortgage, and how much go toward luxuries like your cable TV and monthly subscriptions, such as for streaming, music, or books. Determine if you can reduce your expenses so you’ll have more of your income at your disposal. For instance, you might be able to cut subscriptions you no longer use, reduce the number of premium cable channels you have, or find a less expensive mobile phone plan. Once you know how much of your income you’ll be allocating each month toward your financial responsibilities, you can compute how much you will have remaining. Note this figure so you can use it later to create your monthly budget.

Find ways to save

Besides the tactics mentioned above, there are many other methods you can use to cut back on spending. Remember that saving a dollar or two a day might not seem like much at first, but it can add up so you may have enough to help to pay off your debt or build up a down payment for a home.

• Avoid paying high retail prices by buying used or shopping at thrift shops.
• Carefully keep track of when your credit card and other payments are due, and aim to pay them on time so you won’t incur additional fees.
• If you can find other ways to work out, consider dropping your gym membership.
• Look for coupon codes when shopping online to get discounts or free shipping, or try a service like Rakuten to earn rebates on online purchases.
• Organize your belongings so you can readily find them and avoid accidentally buying duplicates of items you already own.
• Use a cash-back credit card for your purchases. If you choose your credit card wisely, you may be able to get anywhere from 2 to 5 percent cash back for every purchase you make. That’s at least twenty dollars saved for every thousand dollars spent. You might even be able to put bills like your car payments on your credit card to earn even more cash back.

Set goals

Once you have a full understanding of your financial health, set some financial goals for 2024. If you have high student loans or carry a balance on your credit cards, one goal could be to work on paying off your debt or refinancing it to get better terms or a lower interest rate. You could also set aside some money for an emergency fund so you’ll have cash on hand for any unexpected event, such as a flat car tire, or an emergency room visit. If your finances are in good shape, you could instead consider goals like buying your own home or car, augmenting your retirement savings, or increasing your net worth by increasing your monthly savings or investments.

Make a budget

Once you’ve picked your financial goals, set a budget for yourself to help you reach them. First, note or put aside the funds you need each month for rent, utilities, groceries, and other monthly bills. Determine what you want to do with any remaining monthly income you have left. You can allocate money for fun extras like dinners out or shopping, but be sure to reserve at least some of it for the financial goals you’ve set. A helpful tool like Mint.com may make it easier to track your budget.