Dec 21, 2012 was a special day for many. We managed to avoid global destruction. This should and hopefully will give us a new appreciation for the way we’ve lived our lives as near death experiences typically do. It’s a chance to emotionally charge ourselves to change things that we’ve always wanted to but lacked the discipline to do. Lose weight, quit smoking, start that project you’ve always thought about… these are all the cliches you hear around this time of year.

I want to introduce a new one, and that’s to think about your money. So here are three new year’s resolutions to make for the new year.

1. Create a Budget

From the biggest corporation to your everyday blue collar worker, everyone benefits from having a balanced budget. It’s one of the first things my clients and I work on when we meet. From there it acts as a benchmark from which we can build a plan around. It’s easy and simple to do, and the benefits are amazing.

Just grab yourself a piece of paper and divide it into four sections. In one section, write down a list of every source of income you have. For most, it’s just from our jobs, but you never know. Maybe you have rental property or you have a second part-time job; if it’s money coming in, write it down. In the section beside it, write down a list of ALL your monthly expenses. Food, car, drinks on the weekend, how much you spend on clothes, going out with friends, insurance premiums, debt payments… put it all down. Subtract the second number from the first one and you have a net income statement.

Then, on another section, write down a list of ALL your assets: anything worth more than $1000, like vehicles and property. Then on the last section, write down a list of all your liabilities. This is a list of all the money you owe. So, this would include things like student loans, credit debt, and your mortgage. Take the number from your assets, subtract the total liabilities, and now you have your net worth statement. Ta-da! It’s that easy and hugely beneficial.

Now that you have armed yourself with this information, you are in a much better position to put together a realistic budget for the coming year.

2. Take Some Of My Advice

By now you know of at least 8 ways to save money from the monthly “Beyond The Latte Effect” posts. Find one that you feel you would like to take on. Or think of one for yourself. In any case, focus on one thing you can do to stretch apart that line between your savings and spending. If you can keep that up for at least on year, track the results, and see how you’ve done. You’ll be amazed.

3. Educate Yourself

Of all the things that people have strong opinions on or decide to be saavy with, they pick ones that are the most irrelevant. Ask a group of people about the difference between iPhone and Android and you’ll have people who have read up on and will have a strong opinion one side or another. Or you can ask someone about why a sports team was screwed from a bad call or why this team is going to win the championship. When was the last time someone screwed over their life from buying a phone they liked or by picking a losing team?

I’m sure there are more people who became destitute because they placed financial savvy at the bottom of their list of priorities. So, lastly, I’d want for everyone to begin a process, whether it be fast or slow, to learn about the financial tools out there. You can learn about the RRSP or the TFSA, an insurance product or maybe a different asset class. Having a firm grasp of the financial world around you will be hugely exciting when you start seeing the possibilities.

Get Going

In Richard Kiyosaki’s The Art Of The Start, rule one is to simply start. Don’t worry about doing it right. Just do it! Although anytime is a good time to start, with the new year approaching, it’s a bigger reminder to get in gear.