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If 2020 had you stressing about money, you’re not the only one. Even during a global pandemic, one study found that people are just as anxious about their financial health as their physical well-being.

A budget can help you take control in the new year ahead. It’s like your road map through your money journey.

Whether you’re looking to polish your yearly plan or you’re trying to add some organization to your cash chaos, these tips are here to help.

We just decided right now that 2021 is the year to get super intentional about your money moves. How do you do this? With measurable, achievable goals.

Instead of choosing a general intention, like: I want to save more money this year. Try something specific, like: I want to save $9,000 toward a home down payment. To reach that goal in 5 years, I need to save $120 each month.

To create targets that you can easily measure:

  • Set your goals: What do you want?
  • Estimate cost: How much money is it going to take?
  • Estimate time: When do you want it?

Once you know the big picture of your goals, you can work backward to figure out what that means for your budget. You’ll probably find you have to prioritize one or two goals above others, but that’s okay.

It doesn’t matter if you keep your budget in an Excel spreadsheet, with a budgeting app like YNAB, or written in your bullet journal. Writing it out can have a powerful motivating effect.

To make a realistic budget, you have to first understand your spending habits. A great place to start is by tracking your expenses, which can be broken down into two broad categories:

  • Fixed expenses: Predictable and recurring (like rent, debt payments, subscriptions)
  • Flexible expenses: Changes month-to-month (like clothes, food, gas)

It can help to pull up your most recent credit card and bank statements to get specific about how much you spend and where. Once you have a grip on how much you spend vs. how much you make, then you can figure out how much money to allot to your goals.

OK, so you’ve worked out your plan and set your goals. Now you have to make sure your money actually goes where it needs to — on a regular basis. Enter: automatic payments.

Most websites have a way that you can schedule these payments yourself. You can also ask your employer if they can send a portion of your paycheck to different accounts.

If your situation changes, you can always decrease or cancel these automatic payments going forward.

We’d never tell you to get rid of all of the happy things money can buy because not only is that unsustainable, cutting out every indulgence can actually make you more likely to give up on your plan altogether.

Instead, focus on what expenses actually add value to your life (maybe that special Friday pick-me-up latte is the highlight of your week) and find balance by getting rid of the ones that don’t (is that expensive car payment really pulling its weight?)

Holding debt is not, in itself, a bad thing. It can be a tool to help you access things you wouldn’t be able to reach on your own. But paying back that debt can hold you back from other exciting money goals.

Feeling overwhelmed by what you owe? Refinancing and consolidating your debt are two options that can help you find control.

  • Refinancing: This allows you to essentially redo the terms on the remaining balance of your loan. It’s a good option if you can lower your interest rate, but it can also be used to change the length of your loan.
  • Consolidating: This lets you consolidate (aka combine) the balances of multiple loans into one. You might be able to qualify for a lower interest rate or have an easier time remembering just one monthly payment.

When it comes to investing, time is money. In fact, how much time you spend invested in the market is much more important that when you decide to invest. Why? A little old thing called compounding interest.

The money you put into an investment account, like your 401k or Roth IRA, earns interest. And then that interest earns interest, which also earns interest, and so on. Over lots of years, this compounding growth helps even small, steady contributions balloon to big balances.

That means that the earlier you can begin investing for the long term, the better. A little can go a long way with a few decades to grow.

About 3 months in, you might realize you need a lot more lattes than you thought to get you going. Or maybe your circumstances change — you switch jobs, move in to a new apartment, etc. That could mean you need to postpone a goal, or it could mean you have room to treat yourself a bit more often.

Don’t be afraid to check back in throughout the year and tweak your plan. Celebrate the months that you crushed your goals, and try not to get upset about the ones where you went a little overboard on the online shopping. Progress not perfection.

Reading up on financial advice is a great place to start but to get individualized advice, it’s best to find the ear of a professional. A Certified Financial Planner (CFP) can help you figure out your budget and build a full financial plan.

If you’ve been impacted by the COVID pandemic, you can reach out for free guidance from some members of the Financial Planning Association or the Yellow Ribbon Network.

Building a budget for the new year is a great way to get your financial life in line. Make sure your goals are measurable and work to support them with balanced spending habits.

If you need it, you can get extra support from a CFP to make sure you go into 2021 with tons of cash confidence.