The new year is a great opportunity to reevaluate your life and put some things in perspective. Most people decide to set some New Year's resolutions for the upcoming year, to improve their lives in one way or another. Finances are one area where lots of people find that they aren't satisfied. Whether it's from debt or unnecessary spending, it's likely that there's something that's dragging their finances down and making it harder to enjoy everyday life. If you feel like you could use a bit of an upgrade for your finances this year, there are some ways that can get you there without much hassle.

Set some concrete goals

Before you make any significant changes to your finances, you’re going to want to know what it is you’re exactly aiming for. Most people’s goals are pretty simple in this regard – having more money to spend on bills, groceries, hobbies, etc. However, this is generally considered a bit too vague. How many bills do you have due? Do you want to take care of your mortgage and other debts as soon as possible? Are you lacking some essentials for your home? These are all legitimate questions to ask yourself when setting some financial goals, but it’s not enough.

You need to have an idea of how much money you need to have in savings this year. Whether your goal is to get out of the red or to get way into the green, it doesn’t matter. Set a concrete number that you want to reach by the end of the year, or even settle for half the year. It’s going to give you something exact to strive for. You can start doing the math instead of being vaguely aware that you’re doing alright.

Some might be interested in having an extra bit of funds to invest by the time they pay off everything. If so, this goal is going to keep you working hard and saving even more money. Write down a clear number and see if it’s possible to reach it with the financial plan you have for 2020. If the answer is yes, you’re already on the right track.

Form a reasonable budget

Budgeting is absolutely integral to any good financial plan. You can’t know how to spend your money properly if you don’t know exactly what your financial needs are. If you don’t already have a budget plan, now is the perfect time to get down to form it. There are some crucial things to keep in mind before doing so, though.

Are you trying to make a personal budget? If not, what do your spouse or family think about creating this budget? Nowadays, there are lots of couples that choose to have separate finances, to keep financial troubles at bay. It’s not an uncommon situation, and it can influence the way your budgeting goes. The easiest way to handle your own finances is with a personal budget, so start there.

It might sound intimidating to create a budget out of thin air, but it’s a lot easier than you might think. Take a look at all the things that you spend money on every single day. Everything from the bills to random candy bars you get while on your way to work needs to be accounted for. The bills are the easiest part, you get exact numbers on paper. But what about the variable spending that you can’t easily account for?

It would be wise to write down the average spending on non-essential items and services that you employ. If you take a cab back from a night out every once in a while, it's a real expense that is worth noting. With everything written down and ready, you can figure out what's worth cutting and what isn't.

Pick your priorities

Budgeting isn’t exactly what you’d call “fun”. When you’re forced to decide which luxury you have to give up, you’re not going to be happy about it. It’s mostly just limiting yourself and how you can spend money. At least, this is how most people view it. The truth is, budgeting doesn’t take anything away from you. Instead, it gives you the ability to control your money in a reasonable way.

Living within your means is always a good idea, but that doesn’t mean you have to give up on enjoying life. There’s no need to feel stingy or take away from the great things that you like to enjoy from time to time. You can easily make changes that don’t impact your quality of life. At least, not in a negative way.

Your budget will help you determine what’s most important for you and your close ones, while also giving you the opportunity to add to your savings every once in a while. Use it to allocate money to things that fulfil you, and to remove funds from things that don't. It might seem simple in theory, but it's a lot harder to actually figure out what you really value.

Some people put extra emphasis on clothes, while not paying much mind to things like eating out or hitting the gym. If you’re enthusiastic about your hobby, you might forsake all of these things and eat at home and do runs in the early morning. There’s a lot of wiggle room to decide what to save on, which gives you ample opportunities to improve your financial situation.

Reduce regular expenses

Bills will make up a big part of your expenses, and this is something you can’t really avoid. You're always going to be using electricity, water, heating, etc. Even fitness and gym memberships are pretty common regular expenses. They’re usually not looked at as an important factor, as they’re pretty constant. However, who’s to say you can’t put a dent in these bills?

Most people won’t pay much mind to their bills, but even the tiniest change can have a huge impact on personal finances. Any savings that you make will be made useful on a monthly basis, as the bills arrive. Over the course of a year, tiny reductions in your bills will add up. When it comes to savings, your best options would be cable bills, insurance premiums, and cell phone bills. People often go overboard with these, which leaves their bills a little too high, even if they think it’s not a big deal.

Work on the side

One of the most effective ways to improve your finances is to increase your current income. Making some extra money will always provide some benefit, as it can increase your spending power and allow you to cover any bills or debts that are due. Getting a boost to your income is much easier said than done, but it’s still something that’s perfectly doable.

There are several ways to go about increasing your income. You could talk to your employer and ask for a raise, but this is something that’s recommended you do either way. Alternatively, you could start a side hustle to complement your current job. Adding another full-time job might not be the most viable solution, especially if your job is already demanding. Instead, what you might want to try is something small with more flexible work hours.

Turn one of your hobbies into a side hustle and you won't have to work too hard. If you're the creative type, you can create things and sell them on eBay or Etsy. Lots of people utilize their hobbies for a little extra cash at the end of the month and it pays off tremendously. You would be surprised at how quickly the cash piles up. If you have any particular skills worth noting, teaching them to other people online could do the trick just fine. Keep in mind that there's always a need for hard work, you just have to find the people who are looking for it.

Automate savings

People aren’t particularly good at keeping their savings. If they were, who would need financial advice? It’s pretty difficult to look too far ahead, which is why we don’t gravitate towards increasing our savings. But this doesn’t mean that we should leave everything up to chance. There are ways of improving your chances of saving some extra money at the end of the month.

One of your best bets would be to automate your savings. There are a couple of ways you can utilize this kind of system. 401k plans are a great option. Setting a certain percentage of your paycheck to go directly to your 401k would allow you to keep savings without worrying about doing it yourself. You just let the plan accrue funds and eventually reap the benefits.

On the other hand, you could also set up an automated transfer from your checking account to the savings account. Banks normally make this easy to set up, so you don’t have to worry about jumping through hoops to get started. Automated savings will make sure you set aside some money without actually having to do anything.

Pay off important debts

Any debt that you have accrued is going to act an unnecessary burden on your finances. They’re part of the problem and need to be taken care of. However, not every debt is equally bad for your financial situation. Some debts are necessary and normal parts of dealing with money. Mortgages are a good example. You aren’t likely to pay it off all that quickly, but it’s still a good investment that’s worth making. There are definitely benefits that come with paying off a mortgage early, however, they might not be worth the trouble. There are more important debts to settle.

Any debt with high interest will continuously damage your financial situation, which is why paying off these types of debts quickly is crucial. Though, this is easier said than done. If you’re unable to set aside some extra funds to cover both payments and interest, your options might seem limited. However, there are some clever solutions you can utilize. Why not pay the high-interest debt off using money from a low-interest loan? It’s a practical solution that buys you some extra time to fix your financial situation. When considering low rate personal loans, make sure you deal with reputable businesses that will give you a good repayment plan. This way, you’ll have some breathing room when you decide to take care of other debts you might have.

Utilize credit card benefits

Credit cards are always a risky venture. If you aren’t careful, they can cause you some serious financial problems. Credit debt is nothing to scoff at, and it often leads people to a cycle of debt, with ever-increasing interest. However, credit cards aren’t inherently bad and you can actually see some benefit when using them, especially if you take advantage of their perks.

It all depends on the kind of card you get. Many banks allow credit cards with special privileges for good spending habits. A rewards or “every day” cashback card can come in handy with just about all of your purchases. These pay a set percentage back for every purchase you make, saving you a lot of money in the long run. There are also similar cards that reward more cashback with specific kinds of purchases. If you’re particularly fond of certain types of products, you can guarantee that these cards will provide you with some noticeable savings.

The trick to handling most credit cards is to pay your credit card balance each month. It’s really as simple as that. There are lots of upsides that go with this move, and you would be smart to take advantage of them. It might be tempting to spend much of your money before your paycheck, but just a bit of restraint will give you additional funds, making it well worth the wait.

Conclusion

When you’re looking to improve your finances, some sacrifices have to be made. Nothing particularly bad has to come of it, but you’re going to have to tighten the belt, as they say. With a little focus and restraint, you can find yourself in a much better financial situation by the end of the year and reach your new year’s resolution pretty quickly.