The new year could bring a new you. Despite what the poets say, money, or at least financial security, can be one of the most important steps toward happiness. On the other hand, money mismanagement and debt can result in financial anxiety, which can cloud decision making and lead to a bad cycle.

There are three basic moves those who want to be smarter about finances should make: gather information, plan and execute.

Some may think making a personal or household budget is too tedious, but it's the most essential part. I suggest itemizing spending into 17 categories and ball-parking what you think you spend each month versus what you actually spend—and then what you'd ideally like to spend for each. It may sound like a lot, but it can usually be accomplished in under 30 minutes each month.

You'll see how extras can sneak in. For example, you may think you spend $3,000 for housing, but don’t forget to add about $120 a month for repairs or furniture. If you're planning to take a vacation post-omicron, remember to include expenses like additional cell-phone charges, yoga classes and fancy coffee drinks in the total.

Next, compare your spending to your income. No judging. Money management requires facts—not guilt, rationales or backstories. The exercise may be cringe-inducing, but people who don’t budget are more likely to fall into debt. Budgeting is like sit-ups: First pain, then gain.

Once you have a clearer picture, it may be helpful to bring in a third party. Any adult, regardless of age or income, can benefit from a session with a non-conflicted, and importantly, fee-only planner they can trust. A fully fledged financial plan can cost thousands, while a session may be a couple of hundred dollars. Avoid conflicted advisors who are brokers, since they don’t advise; they sell investment products. If you are young, low-income or in debt (or all three), try low-fee non-conflicted advisors, many of whom are subsidized by a nonprofit or government agency.

A financial planner will help with the basics like how much to set aside for an emergency fund and what to invest in for retirement, along with how to achieve medium-term goals such as a down payment for a home, or funds for a vacation, car repair or holiday presents. Keep in mind though that fiduciary planners won’t tell you all you need to know about finances, such as how to ask for a raise or find a better job or how to cut back on gratuitous spending.

Lastly, it's time to make it happen, so let this be the year of action—whether that means increasing retirement contributions to the maximum amount, calling Vanguard to create an account for those medium-term goals or paying down credit-card debt.

If any of the above makes you roll your eyes, consider the example of a reader I'll call Alex who lives in New York. She's 64 and has been financially disciplined for the past 25 years, through budgeting, planning and executing. Her financial advisor recently suggested she pay off her mortgage, which has helped to keep her monthly housing costs low. She's been able to accumulate more than $1 million in retirement savings and is now in the enviable position of choosing when she wants to retire.

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