January. The month when your credit card statements arrive looking like a horror story and your bank account whispers, “Really? You spent what?” Between holiday gifts, festive feasts, and “just one more” sale item, your wallet may feel like it went through a blender. You’re not alone, and yes, it’s totally normal to want to crawl under a blanket and ignore your finances until… well, February.
Why January Is the Perfect Time for a Financial Reset
January is the perfect month to hit reset. The holidays are behind you, you’ve packed away the decorations, and the routine of life is settling back into place. Your financial splurges are still fresh, making it easier to spot the patterns that lured you off the straight and narrow of financial discipline. It’s also easier to spot and ditch bad habits, which will help motivate you to make small but meaningful changes before the year really gets rolling.
In this post, we’ll break down simple, realistic steps to get your financial feet back on level ground. No extreme strictness, no impossible resolutions, just practical ways to take control of your cash, trim unnecessary spending, and start the year feeling empowered instead of broke. Smart money moves you can actually stick to.
Step 1: Take a Hard Look at Your Money
Before you can start fixing your finances, you need to reset your thinking. You must be honest with yourself and discover exactly where your money is going, no pretending that it has disappeared and you don’t know where. Think of this as pulling back the curtain on your spending habits (and maybe cringing a little).
- Track your spending:
Start by logging everything for a month. Apps are great for automatic tracking, spreadsheets work if you like feeling like an accountant, and the old-school notebook method works too, especially if you enjoy writing down painful truths in pen. The goal isn’t to shame yourself, it’s to see where your cash is leaking. - Evaluate subscriptions & automatic payments:
Those underused or never-used streaming services, products delivered monthly and building up stock on your shelves, or the gym membership you haven’t used since 2019? They add up fast. Review your recurring charges. For each one, ask yourself: “Am I actually using this?” If the answer is “meh” or “never,” it’s time to cancel or pause. - Crabby Housewife Test:
Here’s a fun trick: for each expense, ask yourself, “Does this bring me joy or regret?” I talked about this in the Minimalist Decluttering for Profit article. If it leans more toward regret, it’s a candidate for trimming. Think of it like Marie Kondo for your wallet.
When you know exactly where your money is going, it’s easier to make smarter, informed choices instead of just hoping for the best.
Step 2: Set Realistic Goals
I used to teach women’s seminars on setting goals, and I cannot stress how life-changing it can be. With finances, once you’ve shone the light on where your money is going, it’s time to decide where it should go. Goals are your roadmap to help you find your way, but they need to be realistic. And, your approach needs to be sensible. Aiming to “fix everything at once” is a fast track to overwhelm and despair.
- Short-term vs. long-term goals:
Think of your goals in two categories: short-term wins and long-term plans. Short-term may be paying off a credit card, clearing a month’s overdue bills, or cutting one unnecessary subscription. Long-term goals might be building an emergency fund, saving for a down payment, or tackling student loans. Both matter, but short-term wins help to keep you motivated, while long-term goals bring your financial house into order. - Prioritize:
Pick one or two goals to focus on first. Don’t try to fix everything in one month. That is like attempting a triathlon with zero training. You’ll start with great enthusiasm but will fizzle fast. Focus your energy on achievable goals that make actual progress, instead of staring at your goals like they are out of reach. - Crabby Housewife tip:
Make progress satisfying. Create a visual tracker, post sticky notes on your fridge, or color-code a spreadsheet. I highlight mine with yellow (my favorite color) when items are completed. There’s nothing like the joy of moving a goal from “pending” to “done” to remind you that yes, you are in control of your money and your life.
Step 3: Create a Simple, Flexible Budget
Let’s be honest: the word budget sounds about as fun as a root canal. But a good budget isn’t about restriction, it’s about freedom. It’s knowing where your money’s going instead of wondering where it went.
The 50/30/20 approach (made simple):
Here’s an easy formula even a sleep-deprived parent can handle:
- 50% of your income goes to needs (rent, bills, groceries, etc.).
- 30% goes to wants (your coffee, occasional takeout, and that streaming service that keeps you sane).
- 20% goes to savings or debt payoff (future you will thank you).
If that breakdown doesn’t fit your life exactly, then tweak it. The goal is to give every dollar a job, not to stress over perfection.
- Make room for fun:
A budget that feels like punishment won’t last. You’re human. You need a little joy money. Whether that’s a weekly latte, a Friday pizza night, or a cheap bottle of wine that pairs perfectly with your Netflix therapy session, include it. Budgeting should work with your lifestyle, not against it.
- Crabby Housewife Tip:
Automate what you can, especially savings. Set up automatic transfers to your savings account right after payday. If you never see the money, you won’t miss it (and you’ll be less tempted to spend it).
A simple, flexible budget is the foundation for financial sanity. It’s not about cutting out every luxury; it’s about keeping your spending aligned with your priorities and leaving guilt out of it.
Subscribe to our newsletter to catch The January Money Reset, Part 2: Keep the Momentum Going for the final three steps in the January reset process.
