DEFINE YOUR FINANCIAL GOALS

To be able to manage your finances effectively, you need to set financial goals. For example, do you want to pay off your student debt? Start saving for a house? Or maybe take that dream vacation?

Setting goals can help you stay focused and motivate you to minimize excess spending. Adding deadlines to your goals also gives you a timeline to work with, pushing you to stick to it while also reminding you there’s an end in sight.

Create a visual so you can stay updated on your success, such as a progress bar taped to your refrigerator. You’ll be even more motivated to spend wisely as you see yourself advance toward the finish line.

GET ORGANIZED

Getting organized is an important step for a better financial life. But, first, set any bills you can to autopay. Missing a payment can be detrimental to your credit and your financial future, so ensure all bills are paid on time.

Also, be aware of how much money you have in all your accounts, including savings. Emergencies are a part of life, and they often happen when you least expect them. So it’s important to be prepared. Many experts recommend saving for at least six months of living expenses to ensure financial stability without depending on credit cards.

Lastly, consider getting rid of items you no longer need. Decluttering your living space can also mean money in your pocket. Hold a garage sale, sell items on eBay or Craigslist, or even donate items for a tax deduction (but don’t forget to track all items donated!).

CREATE A BUDGET

The first step to budgeting is knowing where all your money goes. Track every cent for a month — from rent to food to utilities. Even count your morning Starbucks run or happy hour drinks. Try using one of the many spending trackers available to make this process as seamless as possible.

Based on your spending, create a budget by subtracting your purchases and bills from your earned income; if you’re earning more than you spend, congratulations! You can put that extra money away in savings or toward your other financial goals.

If you’re spending more than you earn, you have two options: increase your earnings or reduce your spending. Either way, creating a budget gives you a clear sense of where you stand financially, allowing you to manage any wasteful spending and re-evaluate where you want your money to go.

MAXIMIZE YOUR MONEY

Whether you’re overspending or have excess income, it’s a good idea to maximize your money and reduce wasteful spending. Little things add up, and cutting them out can impact your finances in a big way.

Get rid of that gym membership you never use or the magazine subscription you forgot about. Use only in-network ATMs, so you don’t get hit with fees for withdrawing your money. Make sure you claim all applicable tax credits and deductions. Shop smarter at the grocery store by making a list and buying only what you need. Find alternatives for expensive items, and compare brands to get the best price.

By trimming excess waste and spending, you’ll find you have extra money you never knew you had — money which can then be put toward your financial goals.

CHECK YOUR CREDIT REPORT AND KNOW YOUR CREDIT SCORE

You should check your credit report at least once a year to make sure there aren’t any mistakes. You can get a free report annually from each credit bureau at AnnualCreditReport.com.

And if you do find an error, take the time to dispute it. A credit score represents your creditworthiness — how much of a risk you may be for a lender. Scores are based on several factors — the most important of which are paying bills on time, every time, and keeping balances low on revolving credit, such as credit cards.