We’re beginning a brand new year, and while you are thinking of your New Year’s resolution of a better diet, more exercise, and spending more time with family, don’t forget about your financial fitness. It’s no secret that financial pressure can cause a huge amount of mental stress. Even with the U.S. economy rounding into shape, 65 percent of Americans say they lose sleep over financial concerns, according to a survey by CreditCards.com. It’s the perfect time to take a break from the holiday shopping and eating out, and get your finances in order before the New Year. It’s time to review your portfolio, find out were your spending is going, and give your finances a little love. Just like diet, exercise, and physical fitness, financial fitness should be exercised more than once a year. Without reviewing your finances and understanding your financial fitness level, it’s difficult to improve and build wealth over time. It won’t happen over night, but if you keep making small improvements, month-by-month, year-by-year, you’ll be amazed at the result.

Spend less than you make
Just like you can’t lose weight if you take in more calories than you burn, you can’t save money if you spend more than you bring in. Spending less than you make on a consistent basis is the key to reaching financial fitness and financial stability.

Automate your finances
If something isn’t easy, most of us won’t do it. Make monitoring your spending easy by using a secure online budgeting system to track and categorize your expenses. Check with your bank or credit card company to see if they offer free online charts that automatically categorize your spending for you. You’ll save hours of work every month while also taking control of your spending habits.

Create a plan
Determine how much you plan to spend and divide that money among your different expense categories. Be sure to allow for some flexibility for occasional impulse buys without ruining your overall plan. Those who successfully create and follow budgeting plans often save as much as 10% of their income during the year – simply because a plan guides them in making good spending decisions.

Save Ten Percent of Take Home Pay
Save at least ten percent of your income by setting up an automatic transfer to a savings account to make it easy.

Start an emergency fund
A good rule of thumb is to have three to six months’ worth of expenses set aside in an account to cover emergency costs that might arise. Keep it separate from other funds to avoid spending it.

Pay down credit card debt
Pay at least the minimum on your credit cards and make a goal to pay off credit cards every month. Making at least the minimum payment on time accounts for 35 percent of your credit score. Take control of your credit card spending and set a goal to pay them off as soon as possible. Paying off the entire balance each month can save you hundreds of dollars in interest.

Make extra payments when possible
Begin paying off your debts as quickly as possible. In today’s economy, the best investment you can make is to quickly pay off all your debts. Making extra payments whenever you can doesn’t require any dramatic changes in your spending habits while cutting years off your long-term debts and dramatically decreasing the interest you will pay.

Max out your 401(K) Contributions
If you’re not taking advantage of a company match, you’re turning down a yearly bonus from your employer.

Review and readjust your stock portfolio
Make sure to sell under-performing stocks and balance your risk. As your investments change in performance, your distribution will become skewed. Readjust your holdings to match your desired distribution.

Check your Credit Reports
You’re entitled to one free copy of your credit report from each of the three credit-reporting agencies at your request each year. Checking your credit report is important because it can often be the first indicator that you are a victim of identity theft. It also provides you an opportunity to clean up any inaccurate information before you need to apply for credit.

Review your insurance policies
Review all of your policies to make sure they cover the current cost to replace items lost in a disaster or theft and make sure your home insurance reflects the current value of your home. The new year is also a great time to shop for lower rates on your policies.