Every January, people decide they’re going to completely transform their relationship with money. By February, most have quietly moved on.
The people who actually improve their finances aren’t doing dramatic overhauls. They look at last year, make a few changes, and stick with those changes past February. That’s what this is - not a transformation, just a look at where you are and a few adjustments.
What Happened Last Year?
Before planning anything, it’s worth spending 20 minutes reviewing 2025.
Your bank app has a year-end spending summary buried somewhere. (Every major bank has this now - Mint dying actually pushed them to build better tools.) If you’ve been tracking in a spreadsheet or using a net worth tracker, even easier.
You’re looking for:
- What came in (salary, side gigs, whatever)
- What went out (rough total is fine)
- What you saved
- Whether debt moved up or down
That last one’s easy to miss. Pull up your oldest credit card statement from 2025 and compare to now. Did the balance actually shrink? Or did things quietly drift the wrong direction while you weren’t looking?
Plenty of people avoid their numbers for years because they’re scared of what they’ll find. When they finally look, it usually isn’t as bad as they’d imagined. And even when it is bad, knowing beats the anxiety of not knowing.
While reviewing, calculate your savings rate: (Income - Spending) / Income × 100. Everyone says 20% is the target. Sure, as an aspiration. But if you’re at 3%, that’s data. Negative? Also data. Measuring is where change starts.
The Budget Thing
I’m not going to tell you which method is best. People get weirdly religious about budgeting, and the differences matter way less than whether you actually stick with whatever you pick.
The pattern that shows up over and over: someone tries detailed tracking, categorizing every transaction, and burns out within a few months. Then they switch to something simpler - automate savings on payday, spend what’s left - and their savings rate actually goes up. Less friction beats more detail.
Three approaches that work:
50/30/20 - Half to needs, 30% to wants, 20% to savings. No tracking individual purchases. Just check monthly that the big buckets are roughly right. (Works well with a simple annual view to see the full year.)
Zero-based - Every dollar assigned before you spend it. Great if you like control and detail. Some people love it; others find it exhausting.
Pay yourself first - Automate savings, spend the rest guilt-free. Often works best for people who’ve burned out on detailed tracking.
If last year’s approach didn’t survive spring, trying something else makes sense. The Monthly Budget Template works with all of these. For longer-term planning - retirement projections, financial goals, net worth targets - the Financial Planning Template provides a more comprehensive view.
The Actual Secret
Everything else in personal finance is a distant second to automation.
One approach that works: transfers set up for the day after payday. Money moves to savings before you see it in checking. Bills pay themselves. Most people adjust to what’s left within a few weeks.
The “I’ll transfer whatever’s left at the end of the month” approach rarely works. There’s never anything left. But automate that same transfer, and six months later many people have more saved than the previous three years combined. No willpower required - the money just disappears before they can spend it. A savings calculator shows what consistent transfers add up to.
The best financial decision is one you only make once.
On Debt
You’ve heard avalanche vs snowball a million times:
Avalanche - Extra money toward highest interest rate. Mathematically optimal.
Snowball - Extra money toward smallest balance. Feels good faster.
Here’s what gets lost: people obsess over which saves more when the real question is which one you’ll actually do.
Typical debt load - $8,000 across credit cards, $25,000 student loans. Difference between strategies? Maybe $300-500 total over a few years. Not nothing, but not life-changing.
What matters more: picking one and doing it for 18 months. That beats switching strategies or quitting. The Debt Payoff Calculator shows both methods with your specific numbers.
Emergency Funds
Standard advice: 3-6 months of expenses. For most people, $12,000-25,000 sitting in savings earning nothing.
If you’re starting from zero, that number is paralyzing. You do the math (or use an emergency fund calculator), realize you’d need years, and just don’t start.
Better way:
$1,000 - Covers most actual emergencies. Car repair, medical copay, laptop dies. Keeps you off credit cards for the medium stuff. First milestone.
One month of expenses - Breathing room. Bad thing happens, you have time to figure it out without panic.
3+ months - Real security. Long-term project.
The shift from “nothing saved” to “$1,000 saved” is bigger than the math suggests. Having a buffer changes how money feels. Unexpected expenses become annoying instead of catastrophic.
The January Checklist
This week:
- 20 minutes with 2025 spending
- Calculate savings rate
- Check debt year-over-year
Before February:
- Pick budgeting approach
- Automate savings transfers
- Cancel forgotten subscriptions
Ongoing:
- 30 min monthly with the numbers
- Net worth quarterly
Short list. On purpose. People who get good with money aren’t doing twelve things. Three things, consistently, for a long time.
What Works
After watching a lot of people try to get better with money:
Automation beats motivation. Every time. $200 auto-transfer beats “I’ll save when I can.”
Attention beats precision. Don’t need to track every coffee. Just looking at spending monthly - actually looking - changes behavior.
Consistent beats intense. $150/month for five years is $9,000+. $2,000 saved once in a burst of motivation, then nothing for three years, is $2,000.
Tools help. But they’re not the point. Paying attention is the point.
Tools
These are the resources mentioned throughout this guide. Pick what fits your situation rather than trying to use everything.
- Financial Planning Template - comprehensive planning and projections
- Net Worth Tracker - track assets and liabilities
- Annual Budgeting Planner - full year budget view
- Monthly Budget Template - monthly expense tracking
- Savings Calculator
- Emergency Fund Calculator
- Debt Payoff Calculator