Begin by listing and quantifying your financial goals, and then rank them in order of importance. If you have previously established financial goals, consider whether they are still appropriate, update the goals for your current situation, and assess your progress in attaining your objectives. Prepare or update your personal net worth statement. Estimate income and recurring expenses by month for the coming year. Do not make the budget overly detailed.
Personal budgets are most effective when they are short and simple.
Adjust tax withholding amounts if too much or too little was withheld in 1996. To change withholdings on wages, submit a new Form W-4 to your employer. Identify opportunities to refinance or replace existing debt at more favorable terms. Evaluate the adequacy of your retirement savings. Consider the effects of inflation on retirement funds.