Many of us are relieved that 2020 is over and we are beginning a new year.

Last year was not a year that any of us would have wished for. The firestorm arrived in March when the whispers of COVID-19 became a reality. Our rug was pulled out from under us, and life quickly changed. The stock market fell, unemployment levels climbed and anxiety became an emotion we felt daily. In the end, the year was full of highs and lows. The markets recovered, some businesses failed while others thrived, all while we quarantined. In some manner or another, life was different.

This year, we may have the same resolutions as in the past — such as losing weight, exercising or eating healthier. Or our normal resolutions may feel frivolous because our needs have significantly changed. Our goals may be much direr this year, such as finding a job or putting food on the table for our family.

No matter where you fall on the spectrum, as we enter the new year, take a bit of time to review your finances.

Do you know your net worth?

Whether your net worth is high or low, you should understand what it is. Without understanding where you are now financially, how do you plan for your future? Calculating your net worth sounds complicated, but for most people, it’s not. Make a list of your assets (what you own). Then, subtract the liabilities from the assets (what you owe) to determine your net worth. If you have never done this, use this year’s net worth statement as a benchmark going forward. Every January, compare your statement of net worth to those of prior years.

Is your net worth growing or decreasing? Understand why it has changed. Are you saving more, has your debt increased or was the stock market up or down?

Create a budget

Do you know where you’re spending money? Most people know their mortgage and car payments, but fewer pay attention to the amounts they spend on food, Instacart or online purchases, especially if they are using a credit card.

Budgeting will help you understand how you’re spending. Track all expenses for a minimum of 30 days or, better yet, the entire year. Write out monthly expenses first, then add up any additional spending. After you’ve tracked expenses for a month, think about the following:

— Where can you reduce spending? If your income has decreased and there’s a monthly shortfall, examine which expenses can be eliminated or minimized.

— Are you using credit cards monthly because you’re short on cash? If so, does the card come with a low interest rate? Do not avoid looking at the statement to understand the rate and your options.

— How can you eliminate outstanding debt?

— Are you maximizing your annual contribution and employer match in your retirement plan?

— How much will you need to save to maintain the same standard of living in retirement?

— Are you saving enough to meet goals?

Plan for big-ticket items

Are you planning on moving, buying a car, replacing your roof or paying for college tuition in the future? Do you know how much this expense will cost, and have you thought about how to pay for it? If the money is not readily available in the savings account, pencil out a timeline, break the expense down to a monthly cost and plug the expense into your budget.

To avoid accumulating unwanted debt, what changes in your spending can you make now to save for this goal?

Prepare for the unexpected

As we were reminded in 2020, life can change unexpectedly and fast. Are you prepared for a job loss, illness, disability, natural disaster or lawsuit? Insurance and savings can protect you against unforeseen events.

— Do you have an emergency fund with at least six months (or more) of expenses in a savings or money market account?

— Are you adequately insured to meet your risk?

— Do you have a disaster plan in place and supplies readily available if an unexpected natural disaster occurs?

If you are tech-savvy, consider storing inventories and important documents on a portable hard drive. It’s also a good idea to retain copies of birth certificates, passports, wills, trust documents, records of home improvements, and insurance policies in a small, secure evacuation box (the fireproof, waterproof kind you can lock is best) that can be grabbed in a hurry in the event of an evacuation.

Protect your estate

Without proper beneficiary designations, a trust, a will, and other basic documents, the fate of your assets or minor children may be decided by attorneys and tax agencies. Probate fees, taxes and attorneys’ fees can erode your estate and delay the distribution of the assets when heirs may need them the most. If estate planning documents are not in place, schedule a meeting this year with an attorney who specializes in estate planning.

As we enter a new year and ponder the outcome of 2021, the unknowns are many. While our future may be uncertain, understanding where we stand financially provides the opportunity to make sound financial decisions, not emotional ones. While we cannot control our future, we can control our actions, understand where we stand financially, and make sound financial decisions based on that knowledge.