Holiday spending and end-of-year expenses can throw anyone's finances out of whack. That's likely why saving more and spending less is such a popular New Year's resolution.
But you don't have to wait until 2018 to take control of your finances. Here are 15 things you can start doing before the end of the year to improve your financial situation — develop better money habits today.
Set One Major Financial Goal
Ryan Inman, a fee-only financial planner for physicians at Physician Wealth Services recommends setting one major financial goal for the coming year that you can start making progress toward now.
To achieve it, "break that goal into smaller more manageable goals and actually put them in a calendar to set deadlines," Inman said. Not only will this keep you accountable, but it will also help you achieve a bigger goal over time that you might otherwise have been reluctant to tackle, he said.
Create a Budget at the First of Each Month
Creating a budget to stay on top of your finances can be the key to developing better money habits. Club Thrifty co-founder Holly Johnson said she and her husband create a zero-sum budget at the beginning of each month to plan where every dollar that comes in will go. Budgeting is easier when you start with the right budget template.
"We talk over our planned spending, our bills, and any 'extras' we need to account for during the coming month," Johnson said. "We have done this every month for years now, and I credit a lot of success to these monthly meetings and the accountability they bring to our lives."
Regularly Monitor Your Net Worth
It's important to keep track of your monthly cash flow with a budget, but you also should get in the habit of looking at your bigger financial picture by calculating your net worth. "Net worth is the actual measuring stick of wealth, not your working income," said Chris Peach, founder of personal finance blog Money Peach. "Therefore, checking your net worth throughout the year is a must."
Every three months, he and his wife monitor their net worth by adding up all of their assets (what they own) then subtracting their liabilities (what they owe). For example, if you had assets of $385,000 in cash, investments and your home, and liabilities of $230,000 in mortgage and consumer debt, you'd have a net worth of $155,000.
Make a Weekly Credit Card Payment
To stay on top of the holiday shopping season, start making weekly — rather than monthly — credit card payments. This is one of the good habits Johnson has adopted to stay on top of her finances, and it's also a good way to dig yourself out of debt.
"I think it's far too easy to disassociate from credit card spending because you don't see the money leave your account right away, so I force myself to be accountable by paying our cards off weekly," Johnson said. "This helps us stay on budget while also making us accountable for everything we charge."
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Keep a Daily Spending Journal for a Month
Changing habits requires increasing your awareness of bad money habits you need to break. One way to do this is keep a daily journal of all of your spending — cash, debit and credit transactions — to see where your money is going, said Belinda Rosenblum, president of financial coaching company Own Your Money.
"For most [people], I encourage them to do this for a month to get a more complete picture," she said. At least, though, try tracking your spending for a week. You'll likely realize how informative it is and keep going the rest of the month, she said. Then you can pinpoint where your money trickles away — areas where you're spending too much — and create a plan to plug those leaks.
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Ask for Receipts for All Purchases
Retailers often ask whether you want a receipt, and your default response might be "No" because you don't want that paper piling up in your wallet or purse. However, if you want to develop better money habits, Rosenblum recommends asking for receipts whenever you spend money.
"Put your receipts in a specified location daily so they do not get lost," she said. Then you can use them to maintain your spending journal, stay on top of your budget or check them against your account balances to make sure there are no incorrect charges.
Switch to Only Spending Cash for 7 Days
To become more conscious of your spending, Rosenblum recommends using only cash for seven days. "Determine an amount you will need at the beginning of the week and what the funds will get spent on," she said. As you pay with cash, you will become more present in each transaction.
"Studies show that people spend an average of 15 percent less when using cash instead of credit cards," she said. "See what happens for you." It turns out, living a cash-only life is possible.
Devote Time Daily to Getting Organized
It's hard to stay on top of your finances if you're not organized. Rosenblum recommends getting in the habit of spending 15-30 minutes daily going through piles of mail, cluttered drawers or catch-all baskets. Sort bills that need to be paid, check account balances online and file receipts or other important documents.
"This is key to peace of mind and focus," she said.
Nickname Your Bank Accounts
A GOBankingRates survey found that 39 percent of Americans have $0 in a savings account. A great way to motivate yourself to save is to name your savings accounts based on how the money will be used — such as emergency fund or home down payment — and to set up automatic transfers from each paycheck.
"By naming our savings accounts and funding them automatically every paycheck, we are not only assigning our money a 'job' but also associating emotions around each account," Inman said. For example, his family's travel savings account allows them to save on regular basis for vacations to places they have always wanted to visit.
"Recently, we have changed its nickname to Iceland Family Trip," Inman said. "If there was a bigger purchase we wanted to make, we both know we wouldn't rob our Iceland family vacation fund in order to buy something that isn't as important or wouldn't give us the same satisfaction and joy. The more personal you can make it, the less likely you are to overspend in the short term."
Save 10 Percent of Each Paycheck for Retirement
One of the better money habits you should adopt is saving for retirement. Carla Dearing, founder of online financial planning service Sum180, recommends saving 10 percent of your income.
For example, to save for retirement with a $50,000 salary, you should set aside $5,000 annually or about $417 each month to reach the 10 percent mark. Have that amount automatically deducted from your paycheck and deposited in a 401k or similar retirement account. Then the money comes out "before you have a chance to spend it on something else," Dearing said.
Save Your Bonus, Overtime or Promotion Pay
"It is tempting to treat your year-end bonus or other unusual income as play money," Dearing said. "Don't do it. Instead commit to a new habit: Sock away these lump sum amounts immediately, then leave them alone."
You should do the same with any other financial windfalls such as tax refunds or gifts. If you add this money to your retirement savings account, you can reach your savings goal faster.
Commit to a No-Spend Month
After finishing your holiday shopping, Dearing recommends resetting your spending habits by taking a no-spend month. "This is a great way to jump start a savings campaign, and it can make a big difference in your personal balance sheet," she said.
Commit to spending only on necessities for a 30-day period. That means taking your lunch to work, embracing free entertainment options and, if possible, walking or biking to work rather than driving. "Not only will you save a lot of money during this one-month period, you may find yourself re-evaluating old spending habits altogether and deciding you prefer your own creative, low-cost alternatives," she said.
Do an Insurance Check-Up
Dearing recommends getting in the habit of doing an annual review of your insurance coverage. This is one of the good habits you can start before the end of the year to ensure your assets are protected from potentially catastrophic losses in the new year.
"Review your home, health and auto insurance policies to make sure you have enough coverage to protect your savings and your family in case of a medical, legal or other emergency," she said.
Schedule Monthly Financial Date Nights
To get on the same page financially, couples should talk about money regularly. Dearing recommends scheduling a monthly financial date night with your significant other to share your expectations and goals for your money.
"Use the meeting time to assign money-related tasks, talk about future financial decisions and review progress toward your long-term goals," she said. "This regular investment in keeping your joint financial house in order will pay huge dividends for your relationship."
Spend 15 Minutes Daily Improving Your Money Mindset
You can develop better money habits by devoting 15-30 minutes daily to improving your money mindset and management skills, Rosenblum said. You can do this by reading an article or two from a financial website. You can watch the financial news on TV or a money-related YouTube video. Or you could read a personal finance book — Rosenblum's "Self-Worth to Net Worth" is a good place to start.
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