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There’s no time better than the beginning of the year to set some fiscal goals and create a plan for bettering your financial situation. You are probably ready for a brand new beginning and the thought of sticking to a budget after the holiday spending spree might sound a little more appealing than it would at any other time of year. Here is a step-by-step guide to consider that create some annual goals as well as a financial plan that will help usher in a whole new financial foundation for you and your family.

Step one: List your goals for this year. It is important to remember that this step involves setting goals that are specifically to be achieved this year. That could involve paying off credit cards or small loans, saving money for a large purchase at the end of the year, or reducing your monthly bills so you can reduce your hours at work. This step should be completed with your family so that you can all discuss the goals and prioritize them. That helps to keep you all involved in committing yourself toward the goal and makes financial sacrifices easier for everyone to make.

Step two: Create a household financial plan. Your financial plan should be comprehensive and should consider all the insurance you have, the deductibles you have, and the emergency savings you have. The plan should also outline your average monthly budget, your debt and your plans for debt repayment or reduction. The purpose of the plan is to help you to recognize any shortcomings you have in insurance and savings needs and to give you some idea of how practical and achievable your goals are.

Step three: Make a new budget. In this budget, you should compare your income to your fixed monthly expenses and then determine what portion of your extra income should go toward achieving your listed goals for this year, which to apply to your long-term goals, and how much to set aside for shoring up all the shortcomings you found in step two.

Step four: Make sure your investments are well diversified. Because a loss in your savings account, retirement account or college savings plan could adversely affect the budget and financial plan you have created, it is a good idea to make sure these accounts are all well diversified. By diversifying the assets you have, you create a layer of protection against losses. For instance, if you are heavily invested in company stock and the industry you work in has a bad year, you could see your retirement account balance decrease significantly. While this may not equal a definitive long-term loss (since the stock could increase over the next few years) it will certainly shake your confidence and create perceived financial stress as you become unsure of whether or not your retirement savings will be enough. Make sure to have a balance in all your accounts of fixed products, high risk investments and low risk investments as well as investments in difference industries.

Also take some time to assess changes that have occurred and changes that may occur. Do you have children that need to start saving for college? Are you planning a move and need to save more for that? Did job changes occur that impacted your outlook? These and many other situations need to be assessed and included in your planning.

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