If you missed Part 1, check out The January Money Reset: Simple Ways to Take Control of Your Cash. For part 2, we’ll pick up where we left off and start with Step 4 in the reset process.
A January money reset isn’t about guilt or punishment; it’s about power. You’re not trying to live on rice and beans or give up every little joy; you’re simply choosing to pay attention and have a plan for where your money is spent.
Small steps, tracking your spending, setting goals, and building habits, add up faster than you think. By this time next month, you could feel lighter, more confident, and a whole lot less crabby about your bank balance.
So grab that notebook (or open that app), pour yourself a coffee, and start your reset today. Your wallet and future self will thank you.
Welcome Back to Your January Money Reset!
Before we dive into part 2, let’s recap part 1. We discussed getting honest with your spending, setting realistic goals, and building a simple, flexible budget. If you’ve started the reset process, faced your spending habits, set real goals, and built a budget that doesn’t make you miserable, that’s a gold star for you! Now let’s keep that energy going with steps 4-6. In Part 2, we’ll talk about tackling debt, building smart money habits, and adding a few fun ways to save this month.
Step 4: Tackle Debt Strategically
Debt happens. Whether it’s credit cards, student loans, or that “emergency” purchase replacing your tires, what matters is how you handle it. You don’t need to wipe it all out overnight. You just need a plan to tackle it strategically.
Snowball vs. Avalanche:
- The snowball method means paying off your smallest debts first. It gives you quick wins and motivation.
- The avalanche method targets your highest-interest debts first, saving you money long-term.
Pick whichever keeps you motivated. Progress, not perfection, is the goal.
Negotiate your rates:
It takes a little time and effort to make the phone calls to negotiate your rates, but the payoffs may surprise you.
- Credit Card Interest: Contact your credit card company to see if they will lower your interest rate, particularly if you have a good payment history. It takes about ten minutes and might save you hundreds. The worst they can say is “no,” but sometimes, they’ll surprise you with a “sure.”
- Insurance: Shop around for quotes for home, auto, or health insurance. You can often find lower premiums by asking for them, especially if you have a good payment history. I recently shopped around for a better deal on health insurance and saved myself $100 a month for the same coverage through a different broker!.
- Medical Bills: Medical debt can feel overwhelming, but you have options. You can negotiate those bills, look into consolidation loans, or check for low-income assistance programs. But here’s an often-overlooked trick: call the provider or hospital billing department directly. Explain your situation and your desire to pay the entire bill at once with cash or a single lump sum. Many healthcare providers offer a “prompt-pay” or “self-pay” discount for patients who pay upfront, sometimes as much as 10–30% off. It never hurts to ask, and you might be surprised how willing they are to work with you.
Trying to reset your habits can be a little challenging at times. To keep your motivation from flagging, try this hack. Each time you pay off a debt, celebrate… cheaply. Cook your favorite meal, pour a glass of something bubbly, or cross it off your list in giant in a bold, satisfying color. Seeing progress builds momentum, and momentum builds success.
Step 5: Build Smart Habits for the Year
Big resolutions fade fast. Small, steady habits are what keep your finances healthy. Think of it like building a brick wall with one brick at a time.
Regular check-ins:
Schedule a weekly or monthly “money date” with yourself.
- Review spending
- Tweak goals
- Remind yourself that you’re running the show.
Practice mindful spending:
Before buying something that isn’t essential, wait 24 hours. You’ll be shocked by how often the urge disappears and how much calmer your spending history looks.
Boost your emergency fund:
Start small. Even $10 or $20 a week adds up fast. Aim for one month of expenses first, then slowly build to three. It’s your “sleep better at night” fund, not just a rainy-day backup.
Step 6: Bonus — Fun & Frugal January Challenges
Saving doesn’t have to be boring. A few playful challenges can keep things interesting and make frugality feel rewarding, instead of restrictive.
- Try a no-spend week:
Pick a week where you only buy essentials. Get creative with pantry meals or rediscover that forgotten frozen dinner in the back of the freezer. - DIY and swap it:
Host a clothing or book swap, learn a simple DIY repair, or master your favorite coffee order at home. Small swaps can save big over time, and are way more satisfying than mindless scrolling on shopping apps. - Frugal self-care:
Not spending doesn’t mean not treating yourself. Take a walk, read a book, binge your favorite comfort show, or take a long bath. The best things in life really can be free.
Stay the Course
The hardest part of a money reset isn’t starting; it’s sticking with it once the excitement fades. But here’s the good news: you don’t have to do it perfectly. You just have to keep showing up.
Each smart decision, skipping one impulse buy, saving a few extra dollars, paying down debt, adds up. By spring, you’ll look back and realize how far you’ve come.
So stick with it. You’ve already done the hardest part: paying attention. The rest is just practice and a little persistence.
