What a year 2011 has been. The debt bubble has truly burst and the effects of poor money management are being felt all the way to the top. Debt is undoing entire nations and putting increasing financial pressure on people whose incomes are already stretched.

That means there’s no better time than 2012 to take control of your money. Here are 10 fiscal New Year’s resolutions to get you started:

1. Know your financial position–put a budget together

Budgeting is the only way to develop a true understanding of your financial position. For your budget to work, it should be a year-long plan that takes weekly, monthly, quarterly and annual expenses into account, as well as safety net savings and realistic amounts set aside for special events such as Christmas and birthdays. Budgeting is like a road map—it helps you plot the fastest path to your financial goals.

2. Pay off debt

Start by prioritizing your debts and bills. Your rent or mortgage should be your highest priority, followed by those debts with the highest interest rates. There’s also merit in first paying down those debts which make you feel the worst—perhaps a loan from a friend or family member that weighs heavily on your mind.

3. Set a goal and start saving

Set yourself a savings goal and enjoy watching your balance grow throughout 2012. Your goal should be realistic—even small amounts will add up over time. The best way to start saving is to ask your employer to disburse a set amount of each pay packet into a separate savings account which has no ATM access.

4. Live within your means

If overspending was an issue for you in 2011, take some time to think about why. Has it been due to unmanageable debt? It might be time to talk to your creditors about a more affordable payment plan. Or it might be time to cut back on unaffordable lifestyle expenses. Big savings can come from paying less for rent, trading down to a cheaper car, cooking at home, cutting back on clothes and gadget shopping, and doing less partying!

5. Embrace simple living

How much money in 2011 did you spend on “stuff?” That foot spa you never use. The George Foreman Grill that’s still in the box. A shirt that was too small when you bought it. Now is the time to rid yourself of clutter and embrace simple living. Have a garage sale, sell it on eBay, give it away or donate it. Let 2012 be a year of sufficiency.

6. Evaluate your insurance premiums

Insurance premiums can vary widely. The cost to cover the same driver with comprehensive auto insurance can differ by up to $1,000 a year between different companies. The same principle applies to health insurance and home and contents insurance. Always collect at least three quotes and make sure you’re comparing apples with apples. In 2012, make a habit of shopping for the best offer.

7. Cut back on small expenses

We’re all guilty of little fiscal vices that add up over the year. Cut your grocery bill by $10 a fortnight by saying no to chips, chocolate and softdrink and you’ll save $260 a year. ($260 goes a long way towards Christmas groceries.) Stop buying a daily latte and you’ll save at least $1,000. Make your lunch instead of buying it and you’ll have an extra $1,500 in your pocket. Put the money you would have spent on these things in a jar or piggy bank. What would you do with an extra $2,500 in 2012?

8. Use cash not credit

Australia’s combined credit card debt reached a record high this year and we’re now paying $7 billion a year in interest charges alone. Nervous about not carrying your credit card? Try using cash for just one month and see how much easier it is to stick to your budget. Cash is even better than your debit card because it’s a constant visual reminder of your budget every time you open your purse or wallet.

9. Save up for big purchases

Say no to the “buy now, pay later” culture and take enjoyment from saving for the things you want. Some banks allow you to organise your savings into sub-accounts for special purposes. You’ll find that watching you money grow provides just as much excitement and fulfillment as the idea of spending it!

10. Take action now

It’s natural to feel embarrassed or stressed if you suddenly find yourself with money troubles, and it’s tempting to hope that your problems will take care of themselves. Unfortunately, they never do and the longer you let things go, the less options will be available to you. Talk to a friend or family member who’s good with money, a financial counselor or personal budgeting expert. Get back on your feet in 2012, and stay on them for good.

This article was featured in The Advertiser ‘My Week’ lift-out. Catch more of Tammy’s money-wise tips in The Advertiser every Monday and in other News Limited publications.