Getting your priorities (and finances) straight in 2012.

So we’re nearly two months into 2012. How’re we doing? If you’re like me, you’re knee-deep in tax land right about now. A perfect time to get a really good look at your finances. Do they align with your priorities?

Think about what you have, what you want and what you really need. This can vary greatly person to person. It is easy to confuse what you need and what you want. When it boils down to it all we really need is to provide basics (food, clothing and shelter) to our families in a safe environment and (fate willing) live out healthy, happy lives.

Unfortunately, this is harder to come by these days, but a lot of it comes down to priorities.

How your finances are can speak volumes about your priorities. As they say, money talks. Gather up all your bills and paystubs for the month and break out the old Excel document (or Google docs if you prefer). Write down the monthly amount owed on debts including interest rates, utilities, income, housing costs, car insurance, health insurance, food and gas.

Food and gas can be a nebulous thing because they fluctuate. In order to figure out how much your spending on these and other items like shopping, eating out etc. open up a Mint.com account. Mint allows you to connect all of your banking accounts, credit cards and other bills in one place. This will make creating and sticking to a personal budget much easier.

Be sure to add in retirement and savings. And unless you are living close to the poverty line you should be able to save. Mint will make easy to understand graphs for you to see clearly how much your spending where. Coupled with your excel document, you should be able to see where your budget is.

The first time you do this, you may be in for a shock. Do I really spend that much on eating out?

Like many Americans, our biggest budget items are housing and health care. Food and transportation are next, followed by our utility bills. The biggest categories also have the potential for the biggest savings, so when looking for savings, focus effort there.

However, there is a ton of low-hanging fruit in the smaller amounts in your budget to cut back. Look for opportunity, make a plan and attack. That freed-up money can then help you meet your budget, pay off your debts and establish that non-existent savings.

You can do this. I promise.

By focusing on getting your finances straight you can reduce financial stress, and perhaps even income. And we now know that reduced income can mean greater freedom. And that’s priceless.