Another year is about to start, and that means that it is a good time to evaluate your finances. Hopefully, you have taken stock of what has happened with your money over the past year, and you are looking forward to the future, ready to make financial resolutions that will stick. If you want to be on the right track, there are some things that you can do to help you out in January to get the year started off right:

1. Start Using Personal Finance Software

One of the best tools for organizing your finances is personal finance software. You don’t even have to run out and buy personal finances software to put on your computer. There are plenty of free web-based personal finance applications that can help you keep up with your spending. If you already use some sort of personal finance software or web application, check your categories and make sure that they are still appropriate and that they help you keep track of your income and your spending.

2. Follow Your Cash Flow

One of the best things you can do for your finances is to know how much money you are bringing in, where that money comes from, and where that money goes. Cash flow is the way money moves through your personal economic system. January is a great time to sit down, look at your bank statements (and personal finance software, if you have been using it) and see where your money is coming from, and where it is going. Look for ways to adjust your cash flow so that you have more money coming in, as well as making changes so that money is sent to savings, rather than being diverted to unnecessary expenses. Get the big picture view of your money now so that you can change it.

3. Start Organizing Your Tax Documents

If you haven’t already, start organizing your tax documents. Figure out what you will need to fill out your tax return (or what a tax professional will need to do it for you). Start collecting documentation for deductions you want to take, and find out what credits you are eligible for. Start a file folder for tax documents and take a few minutes each day to sort through your papers. You don’t have to do it all once.

4. Consider Your Retirement Account Contributions

Now that you have an idea of how your money moves through your personal economic system, you can think about how you can improve the amount of money you contribute to your retirement account. January is a great time to evaluate. If you did not max out your retirement account contributions in 2010, you can plan to have more money put toward your retirement. Figure out how to do it, and make it happen. Your future self will thank you.

5. Reduce the Fees You Pay

This is a great time to re-evaluate all the fees you might be paying. Check your bank statement to see if you are paying monthly service fees for not keeping a certain minimum balance. There may also be fees for using phone tellers, or receiving paper statements. Ask what you can do to reduce these fees or switch banks. Go through your membership fees and publications fees, and get rid of those you aren’t using (watch out for early termination fees). Many Internet providers charge an equipment rental fee — automatically. If you have your own router, double check to make sure you aren’t being charged this equipment fee. Find out exactly which equipment the fee covers. It’s also a great time to put together a debt reduction plan that will help you lower the interest fees you pay on credit cards.

It’s another year, and it’s time to resolve to improve your finances. This checklist will get you on the right track.


Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.