Across cultures, the beginning of a new year is a time for fresh starts and self-improvement. Along with vowing to exercise more and eat less, many Americans use the change in calendar as motivation to tackle poor financial habits. For instance, at the end of last year, 36% of Americans considered making financial resolutions, according to the 2017 New Year Financial Resolutions Study by Fidelity Investments. At the top of most lists: saving more, paying down debt and spending less. Sounds simple, but how?

Make a plan

Here are six steps that will help ensure that your resolutions are backed with positive action.

1. Assess your current status. To determine where you want to go, you need to know where you are. How much do you have in savings and other assets? How much are you earning and spending? Assemble your W-2 and 1099 forms, as well as documents that shed light on your spending, such as mortgage and credit card bills. Create an income statement that shows how much you took in and spent over the past year.

For greater insight, track all spending for a week or a month. Include even small, discretionary purchases, such as lunches out. The numbers may show you’re spending more in certain areas than you realized. Similarly, tally your financial assets, including bank and investment accounts. These indicate how well you’re protected against the vagaries of life, whether a job loss, major car repair or medical expense.

2. Establish a budget. Many financial experts advise breaking expenses into several categories: needs, wants and savings, and for some, a category for charitable giving. You’ll need to identify the breakdown that best fits your income and expenses, but here’s a starting point: 50% to 60% of expenses should be allocated to necessities, 20% to 30% to wants, and 20% to 30% to savings and charities. While every budget is different, if “wants” are consuming much more than 30% of your budget, it may make sense to see where you can reduce spending.

3. Cut debt. If possible, pay off outstanding balances to cut interest expense and free up money to put toward saving. A common approach is to put all you can toward the debt with the highest interest rate first, as that’s most expensive. Meanwhile, continue making minimum payments on the other loans. Once the highest-interest-rate debt is paid off, move to the debt with the next highest rate.

4. Boost your emergency fund. Most financial experts recommend having several months of cash or other liquid assets you can tap in an emergency, so you’re less likely to go into debt. To be sure, building an emergency stash often requires taking a hard look at expenses. Can you cut cable TV? Eat out less frequently?

Take on a part-time job and dedicate the extra money to your emergency fund. Or, identify items you’re no longer using that you could sell. Let family members know why you’re cutting back and how they can help. When everyone understands the goals, they may find the sacrifices easier to understand and accept.

5. Review your insurance coverage, estate planning and retirement savings. Look into both your insurance coverage and your beneficiaries. If you had a child during the year, you may want to increase your life insurance coverage. If you married or divorced, you’ll probably want to change the beneficiaries.

In addition, check to make sure that your estate planning documents are up to date and reflect your current wishes and life situation. Is the executor named in your will still able to carry out these responsibilities? Does your medical directive reflect your current thoughts about the steps you’d like taken in an emergency?

Finally, look at your retirement savings. Many online calculators can help you determine if your savings plan is likely to cover you after you leave the work world.

6. Track progress toward your goals. Whether you use pen and paper or an online app, tracking progress is key to understanding how well you’re moving toward your goals. What’s more, seeing your progress in black and white can help you stay on track, even when you’re tempted to stray.

Make positive changes

Making and sticking to financial resolutions can have a tangible positive impact. The Fidelity survey found that 49% of respondents achieved 80% or more of their goals. And this is key: Nearly two-thirds of those who achieved their goals had improved their financial situation. Your financial advisor can help you create a feasible financial plan for the new year.

Sidebar: Should you save — or pay down debt?

Should you put money toward savings before you’ve paid off your debt? No single answer is right for everyone. But it typically makes sense to pay off debts, like most credit cards, that carry a significantly higher interest rate than you can earn on saving or investment accounts.

On the other hand, making extra payments against debts that carry low interest rates, such as mortgages in many cases, can be less helpful if you have nothing in savings. Should an emergency arise, you may end up taking on debt with an interest rate that’s far higher than the rate on the debt you paid off.Should you put money toward savings before you’ve paid off your debt? No single answer is right for everyone. But it typically makes sense to pay off debts, like most credit cards, that carry a significantly higher interest rate than you can earn on saving or investment accounts.

On the other hand, making extra payments against debts that carry low interest rates, such as mortgages in many cases, can be less helpful if you have nothing in savings. Should an emergency arise, you may end up taking on debt with an interest rate that’s far higher than the rate on the debt you paid off.

© 2017