At this time of year, many people pause to reflect on what they’d like to change about their lives going forward – lose a few pounds, take a class, spend more time with the kids. Often, these goals revolve around personal finances.

But if you’ve been battered by economic forces beyond your control (as many have recently), it may be tough to craft financial resolutions ambitious enough to have a real impact on your situation – especially if you fear that unforeseen obstacles may later force you to scale them back or even lose ground.

That’s why I urge taking baby steps – setting small, meaningful objectives that provide a sense of accomplishment and that you can ramp up when your situation improves. Here are a few examples:

Scale back expenses. If you can’t make a big dent in your monthly costs, like refinancing your mortgage or selling an unneeded vehicle to eliminate a car payment, look for lots of little dents that can add up:

•  Save $10 a week by having one less fast food meal and to-go coffee; or rent a DVD instead of going out to the movies – that might save about $500 a year.
•  Lower the thermostat in the winter by 1 degree and save 3 to 5 percent on your utility bill – saving $5 a month equals $60 a year.
•  Drive slower. Each 5 mph you drive over 60 mph costs about $0.24 per gallon of gas. Properly inflate your tires, keep the engine tuned and cut out aggressive driving habits and you’ll save even bigger bucks.
•  Shop around for better home and car insurance rates, and consider raising low deductibles. (Just make sure your coverage has kept pace with inflation.)
•  Balance your checkbook. Even though many banks have recently lowered fees for bounced checks and overdrafts, one a month at $25 a pop adds up to $300 a year.

Get organized. Even if you can’t afford to pay off all bills in full each month, at least know where you stand regarding due dates, minimum payments due and credit limits so you don’t inadvertently rack up higher interest rates or damage your credit score. If you’re a chronic procrastinator, set up automatic bill payment with your bank – it’ll save on postage as well.

 You can use free online tools like mint.com to help keep track of your budget and plan for future expenses. 

Restructuring or consolidating your high interest credit card debt can many times free up the needed cash to get through a financial storm…and then you can begin to accelerate the payments on that debt as your income improves.  This is the main strategy we use with our clients who qualify for our ‘Debt Melt Down’ program.  If you would like to see how this can work for you, CLICK HERE to apply for your free Debt Melt Down analysis.