Made a New Year’s resolution to sort your finances? Here are the next 10 steps

Good morning or evening wherever you are and Happy New Year!

Let me guess. You had a big night, woke up and had an epiphany. You need to get your life back on track.

If the thing you need to fix is money-related and you don’t know where to start, here are the ten steps you need to follow in order to go from debt-addled stressburger to solvent, chillaxed man-with-a plan:

1. Don’t get into (more) debt

Stop living on credit. Cut your cards if you must. Avoid fintech products that are glorified credit cards.

From now on, don’t buy anything until you can afford cash up front.

You must fix this or you will not get anywhere because those interest payments are dragging you backwards.

2. Make a frugal budget

Download a budget app and use it to record all your purchases over a few months. Check the stats to see where your money is going and cut back where possible.

This will make it far easier to avoid debt (Step 1) and also to complete later steps.

3. Establish an emergency fund

You need a few months’ worth of living expenses put aside in case you lose your job, have a medical emergency, crash the car or something like that.

There is a 100% certainty that some sort of emergency will hit you at some point.

With an emergency fund, you won’t need to borrow and slip back to Step 1.

4. Get out of debt

Once your budget is sorted, you should be able to spend less than you earn each month.

Use the surplus to establish your emergency fund. Once that’s done, begin using the surplus to pay down all your debts, starting from the one with the highest interest rate.

This will be your project for 2022.

5. Increase your income

You don’t need to pull off any brilliant tricks here. Increase your skills, extend your hours or take on an evening/weekend gig.

Working one extra day per week can make a big difference.

This step is not as essential as the others so long as you spend less than you earn. However, pulling it off will make some other steps easier, especially paying off those bloody debts (Step 4).

6. Protect what you’ve got

Ensure you’ve got the insurance that you need and it’s up to date, i.e. car, home.

Also make sure you don’t have unnecessary insurance.

7. Plan your life

Now that your debs are coming under control, figure out what you want to achieve in the future: buy a house, retire comfortably, whatever.

You’ll need to know roughly where you’re going for the next part.

8. Invest wisely

Once your non-mortgage debts are paid off, begin regularly putting your surplus income into long-term investments to help you reach your goals as per Step 7.

For most people, the best investment is a low-cost index fund. However, you must educate yourself on what this is and how it works.

You must understand on a deep level why you can’t panic and sell everything during a market crash before you begin investing.

9. Get advice

Seek financial advice on how to achieve Step 8. Read up on the different options and how to find a good advisor.

10. Record and reevalute

Keep track of your investments, make adjustments as required and rebalance annually.

Need more information?

This whole article has been an ad for my book, The Poor Man’s Guide to Financial Freedom: A Realistic, 10 Step Manual to Building Liberating Wealth on a Low to Medium Income.

It goes through each step in much more detail, with simple examples that an absolute beginner can understand.

If these 10 steps seem to be about at your level, this book is for you. If not, get it for a profligate son or nephew and encourage him to make the required New Year’s Resolution.


For January only, the e-book is 40% off! From $4.99 to $2.99.

Paperbacks are also a buck off ($11.99) in all marketplaces except Australia and Japan. [Nothing personal – the protected book printing industry in those two countries means that any cut in price reduces my royalties to zero.]

If you’ve been umming and ahhing about getting your finances in shape, now’s the time.


Not to put too fine a point on it, but if I had had this book a few decades ago my life would be significantly different now in a financial sense. 

Adam Piggot

This chapter [Step 8] is the main part of the book and I don’t want to give a conclusive summary – buy the book! Long time experience is worth more than a short time hype. You can learn it the hard way or follow good advice . . .


I could have done with this book years ago, particularly when getting over the divorce.


Must read regardless of age


Great guide for anyone struggling with personal finance. Very down-to-earth, simple, effective.
The thing I like about it is an honest approach – no 4 hour workweek nonsense and tropical islands, cold calculated truth.

Friday Finance

Also see my Friday Finance posts right here on SovietMen. I’ve now finished publishing extracts from the book and am posting fresh material.

The book is aimed at novices but Friday Finance is for people who know the basics, i.e. have read the book or already know roughly what they’re doing.

Anyway, good luck with getting your money under control and I hope you’re in a much happier financial position this time next year.

Also available on many other platforms.

One comment

  1. Kentucky Gent · January 4

    “Working one extra day per week can make a big difference.”

    Back when I first had a career-type of job, I still had credit card and student loan debt. So I worked the night desk of a local hote. Working both weekend nights also had the benefit of keeping me from going out on the town and spending more money.

    Pertaining to step 10: About 30 years ago, before I ever had that “career-type job”, I read an article in the paper that recommended tracking your net worth, annually at a minimum. They said net worth should be positive and increasing. I started tracking my net worth exactly 10 years ago, and it has served me well.

    Liked by 1 person

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