Creating a sound financial plan is one of the best ways to prepare for the new year. Whether you want to buy a home, reduce debt (which continues to be a major problem for Americans) or just get spending under control, here’s how to start moving toward your goals.

Revisit the past year

An effective strategy to help manage your money better next year is to examine spending patterns. Figure out your fixed expenses such as mortgage, auto loans or rent; how much went toward necessities with variable costs, such as heating oil or electricity; and, finally, what you spent on optional items such as basketball tickets and mocha lattes. Reviewing the past year’s expenditures reveals where cuts can and can’t be made.

Find out where you stand

Get a feel for your cash position: income, obligations, assets and credit. How much total debt do you really have? Are you carrying high-cost credit card balances or multiple loans? If so, try to budget some extra funds toward paying down those debts more quickly. Or consider consolidating what you owe using your home equity, a personal loan from a lender like United Financial Credit Union, or a balance transfer to lower the interest rate.

Another important area to evaluate is savings and investments. If you haven’t already set up accounts for emergency expenses, education, retirement or other personal goals, this is an excellent time to take those steps. Try to put something away regularly. Even if you can only spare $20 a week, you’ll have more than $1,000 by the end of next year.

Finally, take the time to check your credit reports and score. Any problems you find can probably be repaired, but only if you start the process. Since your credit score reflects how risky you are as a borrower, a low value could stand between you and better financing terms, getting hired for a dream job or being approved as a renter.

Set goals you can live with

To make your financial resolutions easier to live with, they need to be both specific and realistic. For example, just resolving to reduce debt is so vague you may not make much progress. A clearer goal would be to earmark $100 a month to add to a credit card’s minimum payment.

Keep resolutions gentle enough so you don’t feel deprived and give up on them. If you buy lunch every workday, deciding to never spend another dollar that way is going to get old very fast. You’ll more likely stay on track if you resolve to bring your lunch from home three or four days a week but allow yourself a day or two to head for a favorite spot for a midday break with friends.

Create your budget

Once you’ve got a snapshot of your typical spending patterns, assets, liabilities and goals, you’re ready to work up a budget. Add up your income, subtract the costs of your locked-in obligations and necessities, and create a plan for optional expenses that maximizes savings, reduces debt and still lets you feel like a human being. Try to put away enough each month to deal with cash flow issues such as bills that come due before your paycheck arrives. And don’t forget to pay yourself by stashing some cash in a savings account.

Be patient with yourself

Financial goals often take years to reach, so remember that small steps now can add up to huge changes over time. Flexibility is also crucial. If unexpected expenses arise or you splurge on something you shouldn’t have, don’t give up. As long as you keep coming back to your plan and adjusting as necessary, this New Year’s Day can mark the start of a more organized, comfortable and prosperous future.

Roberta Pescow, NerdWallet