As a new year begins, it’s often the time to make resolutions. Some people want to lose weight or quit smoking while others want to get into great financial shape.

If you want to get your finances in order this year, here are five tips:

1. Create a budget

Before you make a budget, you should think about your goals. Maybe you want to pay off debt or set aside some money for retirement. When making your budget, calculate your income and expenses for the past few months. Also, keep track of absolutely everything you buy for a month or two. Once you have that information, you’ll have a clearer picture of where your money goes. Using a spreadsheet or an app such as Mint are great ways to track your spending.

2. Reduce your expenses

First, you have to determine the difference between needs and wants. There are basic needs (such as food and shelter) whose monthly costs are often constant. Of course, you can reduce your food costs by purchasing store brands instead of name brands and by going to a discount grocery store or buying in bulk.

Now take a look at what you spend on your wants. Some items of clothing are needed for work, but designer clothing or a fifth winter coat are wants. Other costs, like your home phone line and cable TV, can be negotiated or eliminated altogether. Eating out can also add up, so cook more often at home. Once you’ve found some ways to reduce your spending, you can begin to save money.

3. Set your savings on auto pilot

An automatic savings plan is the best way to save because you’ll accumulate funds much more quickly. Whether you’re saving for a home or for your children’s education, putting away a certain amount every week or month will get you closer to your savings goals with little effort on your part. If you have extra money sitting in your bank account, you’ll likely want to spend it. But if you have money taken out of your account on a regular basis, you won’t be able to spend what you don’t have.

4. Pay off debt

Most Canadians have consumer debt (such as credit card debt and personal loans). According to Equifax Canada, the average consumer debt load was more than $22,000 at the end of the third quarter of 2016. Credit card debt is the worst kind of debt to have because you’re charged a much higher rate of interest than on a mortgage or personal loan.

If you find yourself with a lot of debt, there are two great methods to paying it off. If you use the debt avalanche method, you’ll pay off the accounts with the highest interest rates first. This will reduce the overall amount of interest you pay over time, but it might be more daunting if the account with the highest interest rate also has the largest balance. Alternatively, you can use the use the snowball method. With this option, you pay down the account with the lowest balance first, followed by the next one and so on. While you won’t save as much on interest costs, it can help build momentum and motivate you to keep paying off debt. Pick the strategy you think will work best for you.

5. Find out your credit score

Your credit score is a three-digit number that measures your creditworthiness. The higher the number, the better your score. A good score can help you qualify for the best mortgage rates or determine whether or not your credit card application is approved. A few sites in Canada, including, offer consumers the option to check their credit score for free.

Your credit score is a good indication of your overall financial well-being, and knowing it can help to identify any problems you have with managing credit. If you want to improve your finances this year, learning your credit score is a good place to start. is a website that compares mortgage ratescredit cards, deposit rates, and insurance with the goal to empower Canadians to search smarter and save money.

Posted by Jessica Kalmar

Jessica is a reader, writer, and outdoors enthusiast.