The New Year is a great opportunity to start your financial planning journey. It is still possible to change your spending habits and set your financial life on track.

Here are my list of money habits to start now:

1. Create a Budget

Budgeting and sticking to it would be my top frugal money tip for the new year. Now is the time to have a solid budget in place.

Budgets are useless if you aren’t sticking to them, so it’s important to set a realistic budget that takes into account where your money goes and how your money is being spent.

2. Automate Your Savings

Automate every financial goal you have such as Savings and Investing.

The simplest way to do this, is by opening an account especially for that purpose and setting up a direct deposit to fund the account automatically each pay period. “With time, this will gradually drive you closer to your goal without missing any opportunities.”

The good thing is that Because it will be paid for before other expenses, you won’t forget, overspend, or fail to include the goal in your budget.

3. Concentrate on Your Needs

Some costs are just unnecessary: “From subscriptions to spending on pricey items that not only can you absolutely do without, but also have more affordable substitutes in thrift stores.”

You can rapidly pay off debt by carefully avoiding certain expenses and allocating the money in other directions.

“Prioritise your needs.”

4. Do not make Impulse Purchases

It often happens quickly, driven by emotions or sudden desires rather than genuine necessity or long-term value.

Avoiding impulse buys can save money, prevent buyer’s remorse, and ensure purchases align with your actual needs and priorities. Taking time to think before buying allows for better decision-making and prioritizes mindful spending.

5. Reduce Debt

Make a plan to pay off high-interest debts systematically. Focusing on clearing debts can save money on interest payments and improve your overall financial health.

Consider strategies like the debt snowball (paying off smallest debts first) or the debt avalanche (prioritizing high-interest debts) to systematically reduce what you owe. Allocate extra funds to pay off debts faster, which can free up money for savings or investments.

6. Educate Yourself

Invest time in financial education. Understand basic financial concepts, explore investment options, and stay updated on economic trends to make informed decisions about your money.

Understanding concepts like compound interest, diversification, and risk management can empower you to make smarter financial decisions.

By focusing on these habits, you’ll build a strong financial foundation and increase your control over your financial future.