You probably already know that it is important to set realistic and achievable financial goals for yourself, and like many of us you may have set some financial goals for 2020 (we won’t call them resolutions). Setting lofty goals may be tempting, but to achieve a goal it must be something that is reasonable for you, and that takes into account your personal circumstances, needs, priorities, and desires. If you want to start the new year and new decade by changing your financial picture, we applaud you! Here are some ways to move closer to financial independence, and some tools we’d like to suggest to help you.

Create a Budget

This is a basic financial move you must make if you want to get a handle on your finances. It doesn’t matter if you use an organizer book, planner, journal, or bill organizer to track your spending, an app on your phone, or a computer spreadsheet – just start tracking where your money goes if you’re not already doing so. If you wonder why there’s no money in your account when you need it, you need to start tracking your spending. One of the first reactions we have once we start keeping track of where our money goes is to pull back and spend less. This is a great first step in managing your money. After all, if you don’t know where it’s going you can’t change where it’s going, right? A budget gives you a financial framework that offers clarity on your financial habits and gives you an easy way to change them in your favor. After three months of budgeting, review your spending to see how close you came to spending what you budgeted for in each category, and adjust as needed. You might find that you didn’t spend as much as you anticipated and can take the leftover money and start funneling it into savings or paying off debt faster.

Get Organized

Budgets offer a way to organize your finances into categories and see where your money goes each month, and just like having an organized closet means you can find what you need, having your money organized by budget categories means you know what you have to spend on something before you pull out your wallet. Once you have your bills grouped into categories, a bill paying organizer is a great way to keep everything together, especially if you’re still getting paper bills in the mail. You can keep bills as well as receipts or notes that document when each bill was paid, which will give you a history to look back on and help you determine what to expect in the future. For instance, if you kept all your utility bills from last year, you can total them up and divide by 12 to get a pretty good idea of your average monthly bill for the coming year, and budget accordingly. Most utility companies will allow you to set up equalized billing, so you can pay the same amount every month, making budgeting even easier.

Set up an Emergency Fund

If you don’t already have one, decide to set up an emergency fund with a minimum of $1,000 in this new year. How will this save you money? Imagine you suddenly need $500 worth of unexpected car repairs on your vehicle. If you have the cash set aside in an emergency fund, you won’t be tempted to pull out a credit card and pay for it. Unless you have a card with a zero percent interest rate, you’ll end up paying that $500 plus a lot more in interest if it takes several months to pay off the balance. Better yet, set up a budget category for anticipated auto expenses (like new tires, for instance) in addition to your $1,000 emergency fund, and be prepared for those kinds of surprises. Speaking of cars, check with your insurance company about “paid in full” discounts. Some companies offer a discount for paying your insurance premium in full that could mean putting several hundred dollars back in your pocket.

Pay off High Interest Cards and Loans

Make a commitment to stop using credit cards in the new decade and pay off your high interest credit cards and loans as soon as possible. Take any extra money such as a raise, tax return, bonus from work, gift, or income from a side gig and put it toward paying off high interest debt first. Interest is money you pay that doesn’t actually give you anything in return, and by eliminating high interest credit card debt you can start putting that money in savings to pay cash for things instead of putting them on a card.

Keep a Journal

 Writing down your plans, goals, and achievements will help inspire you to keep going forward on your journey. A new year offers us all a chance to start over, change how we do things, and make progress toward our goals. Keeping a journal of your goals and the steps you take toward them can be a great way to see your successes in writing. If you write down the steps you take each month and the results of your efforts, you can see what works and what doesn’t, and adjust your actions accordingly. Try writing down one thing you learned each month along the way, and you’ll be amazed at all the insight you will gain. Reviewing your journal entries at the end of the year will help inspire you to set new goals and reach new heights next year, too!

Request Lower Fees

Another way to save money in the new year is to simply ask for lower fees. Once you’ve consistently paid down your debts for a few months in a row, ask for a lower interest rate on things like high interest credit cards. Credit card companies will often run unadvertised specials that you won’t know about unless you call and ask. Even if they aren’t willing to give you a permanent reduction in your interest rate, you might get in on a special, reduced rate for three to six months or more. Take advantage of the lower rate to save money on one or more credit cards. As you pay off your debt, you’ll probably see your credit score improve, which can also help you qualify for a card with a lower interest rate. If you do, you can transfer the balance from your higher rate card, often without paying a balance transfer fee. If you find a lower interest card, let your current credit card company know that you plan to transfer the balance to the new card and close out your current card; this may be enough incentive for them to match the better offer just to keep your business.