A good way to get this started is to establish a budget and commit to it. This budget should pertain to everyone in your household - every spender in the house should be part of the budget committee. Including everyone in the budgeting process will promote a universal understanding of the ultimate goal and encourage all members to be committed.
Re-evaluate your spending habits
It's important to learn from your mistakes and repeat your successes. Tally up your monthly expenses. It is important to establish a mindset that no expense is fixed. Everything is reducible. Start with your daily spending - transportation, parking, food, coffee - More than likely there are less expensive alternatives for all of these. By choosing one or two areas to focus on in the beginning, it will seem less daunting than trying to overhaul your entire lifestyle in the first week of January. The difference in your account balance will be noticeable before you know it. For example $9 a day on lunch adds up to $2,300 a year! Then take a stab at bigger items - refinance your mortgage. Look for scholarships or grants for education expenses.
Manage your credit card balance. Even if you overspent during the holidays and are worried about carrying a balance throughout the year, remember that you do have options. For example, don't forget to use free features available with some credit cards. Chase Slate with Blueprint offers easy to use features like "Finish It," which helps you create a plan to pay down your balance, set a target pay-off date and save on interest.
Good information is at your fingertips - Use it!
There are tools available to help you establish and stick to a budget. For example your bank and credit card companies can provide you with monthly and year end breakdowns of your spending. These year end summaries don't lie. Take a look at 2010's breakdown for guidance on setting 2011's budget. Another helpful resource is mint.com. By linking up with your accounts, this website can help create a suitable financial plan for your household based on your income, bills and debt. Weekly financial reviews will be emailed so you always know where you stand.
Hide your raise
Since the economy is still in recovery mode, annual raises are not as common as they once were. If you are one of the lucky individuals to receive an increase in pay, treat it as though it never happened. You were previously living without the extra bump in pay throughout 2010. Send that money directly to savings or your 401k. Of those eligible to participate in company matched employee sponsored 401k plans, 81% do so. If you are one of the few left not taking advantage of this free money, now is a good time to start.
