Another year means an opportunity to get organized, and what better way to do it than to start with the financial aspect. By learning from last year’s spending, one can learn what to do differently preparing for the upcoming tax season.

“Knowing where your money went helps you make decisions on how to cut your expenses,” says CPA Teresa Halley at Smith, Lange and Halley, P.C. in Sidney. “Otherwise you just keep paying without really knowing exactly how much it’s costing you.”

To aid in organizing your financial house, here are some tips to lead you in the right direction: • Spend less than what you make. Write a list of expenses such as rent, groceries, mortgage, gas, cable, etc. and luxury items such as eating out and gifts given. By knowing where the money went, you’ll be able to make cuts as needed to fit the budget. “A lot of people just don’t know what they should be keeping track of for income tax purposes,” Halley said. “Keep track of expenses such as business travel and mileage, medical bills, charitable donations, mortgage interests and taxes.”

• Use credit cards only as a convenience, not as a monthly loan. “It’s too easy to get in trouble with credit cards,” says Halley. Be sure to pay off the monthly balance as the fees you pay could go to a savings account.

• Invest in computer software that will help manage your budget. There are programs that allow you to enter your checks and income to calculate your budget. “That will tell you how much you made and where your money went,” said Halley, who recommends software such as Quicken for home use, which costs about $59.99.

• Prioritize and pay off debts. According to the Certified Financial Planners Board of Standards (CFPBS), list debts from highest to lowest interest rate, focusing on paying the highest rate loans first. Ultimately, this reduces the interest fees you are paying.

• Save at least 10 percent of income for savings and factor it into the budget.

• Keep an emergency fund of at least three months’ worth of living expenses in case of unexpected expenses. The CFPBS recommends keeping it in a money market account, which allows for quick access and higher interest rates.

• Check insurance to make sure value of the coverage will replace property value and reduce liability.

• Review your will to confirm assets will be distributed correctly upon death.

Getting organized not only helps in reducing confusion and frustration, but also helps in preparing for taxes. However, if the above steps in financial planning become overbearing, consider hiring a professional accountant who will help guide you as well as assist you in getting ready for the tax season.

reporter@sidneyherald.com