Step One: Try using the Budget calculator from Providian’s website to give you an accurate idea of where your money is currently going.

Step Two: Establish goals. Write them down! What bills do you wish to pay off this year? How much money do you hope to have in your savings by the end of the year? Use these goals as your roadmap for what you need to do.

Step Three: Account for your current spending. When people do this, it’s often a real eye opener. For two or three months, write down everything that you spend- even the 99 cent pack of gum! You might be able to cut back on certain purchases that you didn’t even think about before doing this exercise, and it may add up to being able to save more or pay something off sooner.

Step Four: Using the information from previous steps, create a new budget. Figure out how to reach your goals by changing your spending habits, either increasing your savings or reducing your unnecessary expenses.

Step Five: What happens to most New Year’s resolutions? We make them, we write them down, and one month later we forget about them! It’s important to measure your progress on a monthly basis to make sure you are still on track to meet your goals, and determine if there is a need to change any of your stategies.

Step Six: Remember the days when dentists would reward a child with no cavities by giving them a lollipop? It kind of defeated the purpose and that’s why you’d have a hard time finding a child’s dentist that still uses this strategy! In order to maintain your budget though, you may need to reward yourself from time to time- just be careful that you don’t blow your budget by planning lavish rewards that cost a fortune and go well outside your “entertainment” budget amounts!

Do You Need a Money Diet for the New Year? was created by and is property of American Consumer News.