The New Year always brings the promise of a fresh start. It's a great time to set and strive for new goals, whether it’s the opportunity to think about our health and financial wellness, upcoming travel, or plans to check off a few bucket list items.

The New Year can also bring some headaches from last year, most commonly in the financial department. January is when our holiday bills arrive and it can sometimes feel overwhelming to deal with the extra financial strain.  But with a few simple strategies, this can still be a time of renewed energy and focus as you look forward to a future of financial freedom.

Here are five tips on how to get back on the right financial track after the holidays.

1. Look at your finances 

It’s time to take a hard look at all your holiday spending. The presents. The pumpkin spice lattes. List and add up all of your debts. Mortgage, vehicle financing, payday loans, lines of credit — and that inflated holiday-season credit card debt. Don’t include your ongoing living expenses or bills just yet unless you’ve fallen behind on your payments. Right now, you’re just adding up your debt.

Now, list all of your assets. This would include cash in the bank, and any funds in TFSAs, RRSPs, or other investments. Property, vehicles. Get a full picture of all your debt and all your assets so you have a solid foundation for future planning.

2. Budget budget budget

If you already have a budget, now is a good time to revisit it and make updates. If you don’t have a budget, there’s no time like the present to make one. If you need some help, the MNP budget tracker is a great start. This is where you list all of your expected income and your monthly living expenses for food and groceries, travel, commuting, bills, gas, etc. And don’t forget all of those streaming services and memberships.

Try to look ahead at any big changes that you know might be coming. For example, are you expecting a raise or bonus? Are you planning a vacation? Back-to-school expenses in the fall. Are any orthopedic expenses on the horizon? Build these items into your budget as well.

3. Plan for debt repayment and savings

Your budget will now help you determine how much you can put towards your debt repayment each month and/or how much you can save or invest.

Ideally, you don’t want to be carrying debt on our credit cards, lines of credit, etc. If you are unable to pay off the balance owing within a month, then you should be creating a plan for paying it off. This may include looking at ways to reduce your spending, combined with a plan for making monthly payments until your debt is paid in full. Looking into the future to determine whether there will be any other big expenses you need to account for will be useful for setting a realistic timeline for paying off your debt.

Even if you do have debt to repay, it may also make sense to start or continue some savings, if there’s room in your budget.

4. Check in with your progress

Revisit how you’re doing at regular intervals. Financial planning is not a set-it-and-forget-it strategy. Regular check-ins with your progress will allow you to not only see how you are doing against your plans and goals but will also provide you with the motivation to keep going. 

If you find that your budget does not allow for you to pay off your debt within a reasonable period of time, then it’s a good idea to speak with a Licensed Insolvency Trustee to learn some options for dealing with your debt. For some people experiencing serious financial strain, filing for Bankruptcy might be a reasonable option. Or perhaps a Consumer Proposal makes the most sense for you. A trustee will help you review your options. 

5. Set new financial goals

This isn’t just a chance to think about the year ahead. While you’re looking at your finances, start thinking about long-term planning. If you want to take advantage of RESP grants or RRSP tax benefits, it may make sense to use some of your funds to invest in these areas. Think about your retirement. Learn about additional investment opportunities. Whether you pay your debt off first, or come up with a debt repayment plan that allows you to save or invest as well, start putting that plan into action.

There’s also a lot of life to live between now and retirement. Maybe your goals involve a downpayment on your first home, financing a vehicle, or taking that dream vacation in the next three years. Keep up the momentum of reviewing and planning your finances and you won’t just be getting back on track — you’ll be laying the track for years to come.