It’s a new year and, like many people, you might be looking to get a better handle on your finances — and live in a state of contentment, instead of stress.

But how can 2024 be different from last year? Personal financial expert Dave Ramsey suggests you do five these things to change your money situation:

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“If you do these five things, you will win with money 100% of the time,” he said.

So, how exactly does Ramsey propose that you successfully accomplish these five things? We break it down.

1. Have a written plan

If you’ve never made a budget before, the process might seem daunting and complicated at first. Ramsey’s solution is to break the process down into bit and pieces and then tackle each step one at a time. His five steps for budgeting are:

• List all of your sources of income for the month after taxes and other deductions, with a separate line for each item.

• List your expenses and organize them into categories. Start with food, utilities, housing and transportation, and then categorize your other expenses — such as insurance and any debts — as needed.

• Subtract your expenses from your income. This should equal zero. Every dollar should have a purpose — including debt reduction, savings and charity.

• Track each of your transactions. This will help you stay accountable, keep you from overspending and highlight where you might need to adjust your budget going forward.

• Make a new budget before the next month starts. While many items won’t change from month-to-month, some may have seasonal or annual expenses that need to be accounted for.

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2. Get out of debt

In the third quarter of 2023, aggregate U.S. credit card balances rose 4.7% from the previous quarter to a record $1.08 trillion outstanding.

So, if you’re like most Americans, you probably have some type of debt. But if you want to build wealth, you’ll need to reduce and eventually eliminate this debt.

Ramsey says the first step toward paying off debt should be to save $1,000 in an emergency fund. Why? Because this will help build a safety net and prevent you from having to go deeper into debt for unexpected expenses.

Once you’ve done this, you’ll want to get serious about reducing your debt using methods such as the avalanche method, where you pay off your highest interest rate debt first, or the snowball method, where you pay off the debt with the lowest balance first to gain momentum with the bigger debts.

Read more: This Pennsylvania trio bought a $100K abandoned school and turned it into a 31-unit apartment building — how to invest in real estate without all the heavy lifting

3. Live on less than you make

Almost two-thirds (62%) of Americans live paycheck-to-paycheck, which makes it impossible to build wealth.

Therefore, the only way to pay down debt and start saving is to live on less than you make. This may mean cutting costs or finding ways of making more income, or both.

Start by looking at ways you can cut expenses, such as certain food items (like that expensive daily latte) and entertainment (all those streaming services), or consider joining the 23% of Americans who have a side hustle.

4. Save some money

Rich people get rich by saving money, according to Ramsey.

If you free up money with the three steps above, you can then start building wealth by saving instead of spending on discretionary items.

5. Be generous

Once you get back on track financially, start giving some money away. “Giving is the antidote for selfishness,” Ramsey wrote in a 2022 blog post. “It’s the hallmark character quality of those who win with money.”

He argues that the biggest benefit of generosity is contentment. And don’t we all just want to be content at the end of the day?

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.