Welcome to 2021! I won’t even joke about 2020 being a bad year, because at its core, I think it was just different. I learned a lot, maximized opportunities, and perfected the pivot.

That being said, I think January 2021 is a unique opportunity for starting anew.

When I first got involved in the personal finance world, I was seriously overwhelmed by the amount of data most bloggers seemed to have about themselves and their own spending habits. These people could tell you exactly how much they spent every month for the last 5 years, how much they’d invested, their net worth percent change month over month, and every other metric under the sun. As someone who couldn’t even tell you what I had spent on lunches out the week before, I felt inherently behind.

But I was inspired, and the idea of having complete control over my finances was alluring.

Fast-forward to now: I’m one of those people who has a meticulously updated spreadsheet of years of spending and saving data, and I’d protect that spreadsheet with the fervent intensity I used to reserve for planning 21st birthday shot lists and outfits for football games (it’s called #growth, people).

Having been on the intimidated “other side” of this post, I know how it feels.

The beginning of a brand new year is the best time to start.

For one thing, it’ll enable you to capture an entire year of data. While you could technically start anytime, there’s something psychologically empowering about starting on January 1 of a brand new year. You feel like you have a fresh start, which is a powerful emotion to have on your side when starting a new habit (because at its core, that’s what becoming a financially responsible person is – a habit).

Even if you’ve wavered in the past, I encourage you to try again armed with the information on this site. After all, I made 3-5 budgets (and attempted to use Mint an equal number of times) on and off for a year before it actually started to stick. Once I got the momentum on my side, I found it impossible to stop.

Where to start?

If there were a single sentence that summarized all of personal finance beginners, it’d be, “I don’t know where to start!”

The magic that underlies this feeling of utter helplessness is that there is no wrong place to start. Even if you’re most comfortable sitting down with a pen and paper with your bank account pulled up on your phone and manually writing down all your fixed costs, the sense that you have to find the “perfect starting point” is a falsehood.

Personal finance is just one big web. It’s not linear. You can pick anywhere on the web to begin, and then meander to different places as you go.

To make the process easier for people who are starting their first budgets and investing plans, I created the Wealth Planner – it’s unique in that it actually makes recommendations based on your income, and I think it’s a cheap way to eliminate confusion (but you certainly don’t need something this robust to begin!). My first net worth tracker was a hideous Excel spreadsheet in black and white with a few labeled cells and simple “=SUM” formulas. This Wealth Planner is certainly a ‘roided up version of my O.G., and it bakes in all the knowledge I’ve learned over the past two years.

A checklist of stuff to grab before you sit down to set up your budget

• A paystub – this will enable you to see exactly what your gross take-home pay is, and what you pay in taxes. You may know your salary is, say, $52,000, but after taxes you’re probably only taking home about $3,000 per month. It’s good to be able to differentiate between your gross and net income when you start getting into the weeds.

• The login information for your 401(k), if you have one – and if you used to have one and never bothered to roll it over, don’t waste another day. Seriously. Figure out how to roll it over, today. Otherwise, it’s sitting there losing value. (I feel like Personal Finance Guru Asshole when I make statements like this, but I’d just hate for you to literally have to work for a few extra years because you didn’t feel like sitting down and spending 30 minutes rolling over a 401(k) into an IRA and making sure it’s invested properly when you were in your twenties.)

• Your checking and savings accounts – because my friends, they don’t lie. You’ll be able to click into Savings transactions and get a good sense for what you’ve been saving, so when you set your new goals, you know what you’re committing to and how it compares to what you’ve been doing (the Wealth Planner recommends an Emergency Fund goal if you’re not sure how to figure it out). I encourage a hybrid attitude of grace and accountability for this part – try to be objective as you look at your own spending habits. If you’re making $3,000 per month and spending $1,000 on dining out, it’s time to issue a little tough love – barely living within your means is, in some ways, living beyond them. Don’t rob Future You of freedom and happiness because Present You bought too many $14 mojitos.

• Your most recent rent statement – it’s nice to know exactly how much you’re paying for the roof over your head, and I’ve been surprised by how many people aren’t quite sure. Be sure to check the line items: What are you paying for water? Fees? Pest control? Capture the entire monthly cost, not just the advertised rent rate. Our rent is $1,741 for a 2BR apartment, which means we both pay $870.50 – but after you tack on all the extra fees and costs, my actual charge each month is usually about $905. That extra $35 has to be budgeted for, folks, since it’s an extra $420 per year.

That’s it for the major stuff – of course, you probably have a few stray accounts here and there. The best thing to do is set aside two hours to comb through them. Figure out the basics:

• What is this account? Can I log into it?

• Why do I have it? Am I using it?

• Is the money actually invested in this account, or is it sitting there in cash losing value? I heard a horror story once of a girl who opened an IRA when she was 21 (great!) and funded it with $1,000 (amazing!) but didn’t realize she hadn’t actually invested it (in other words, she hadn’t picked funds – it was just sitting there in cash). She checked back in on it when she turned 30, and it was still worth $1,000. She lost out on 10 years of growth! The best of intentions turned into a kick in the pants.

I wrote this blog for beginners that will be a great resource as well; I recommend the following strategy (at a super high level), so where do you land? Which number would you consider your starting point?

1. Start with any high-interest debt (read: credit cards). Prioritize paying this down as quickly as humanly possible, because that 17.99% interest rate is thunderf***ing you out of your future. I don’t mean to be alarming, but it’s serious and should be treated as such.

2. Focus on the Emergency Fund next – the way to avoid credit card debt in the future is to make sure you’ve got enough cash on hand to deal with busted tires, fees when your dog chews up the carpet in your apartment, and all the other lovely things that seem to creep up every 3 months like clockwork.

3. All good on your Emergency Fund, or making decent progress? Great. Let’s focus on investing. Your tax-advantaged accounts (meaning they grow either tax-free or tax-deferred) should come first: Think 401(k) and IRA. Whether you choose Roth or Traditional will depend on how much money you make now and whether or not you’re interested in early retirement.

4. Last comes taxable investing accounts, meaning money that’s taxed going in, taxed as it grows, and taxed coming out.

The blog for beginners linked above dives into the details and other helpful posts, but let this order of operations serve as a reminder! Don’t worry about maxing out your 401(k) or learning everything there is to know about Excel today – just worry about figuring out where on this list you personally land, and start there.