by Pam Coyle

Inability to get into your skinny jeans after too many slices of pie is one thing. But think of the post-holiday financial hangover as a wake-up call for financial fitness.

Take a hard look at your discretionary spending.

Discretionary income is considered what is left for spending, investing or saving after taking care of personal necessities (food, utilities, rent or mortgage payments), insurance and taxes. Money spent on non-essential items such as vacations, concerts, another pair of knee-high boots is discretionary.

Most of us blur the line between what is essential and what is a luxury. Grabbing take-out for dinner rather than planning meals and even freezing some to get ahead. Upgrading to the newest iPhone because it’s out – not because you need it. Spending more than $1,000 a year on lattes from the bistro near the office rather than making coffee at home and taking it with you.

Grab two months of bank and credit card statements and map your spending patterns. Why did you need that $40 from the ATM? If you can’t answer, you may not have needed it.

Make. A. Budget. Seriously. It is time. It is probably past time.

1. Determine how much you need each month for shelter (rent or mortgage plus utilities), transportation (car payment, insurance, gas), food and fixed expenses such as health insurance premiums.

2. Determine how much after-tax income you have each month. Be honest with yourself.

3. Determine your total credit card debt. Making only minimum payments will get you nowhere fast but you need to know where to start.

4. Create a modest monthly discretionary budget – and start by rethinking the difference between an essential and an indulgence. A budget doesn’t mean eliminating fun – it means discipline to enjoy a dinner out or IMAX movie or that new app everyone is talking about.

5.  What is left – and go back to No. 4 and start over if there’s nothing left – devote to paying down credit card debt and saving.

Try to tuck away at least 10 percent (some financial experts suggest 25 percent) of your after-tax income for emergencies, like a sick cat or a sad car. An extravagant birthday present is not an emergency. It is part of discretionary spending. Another infinity scarf is not an emergency. It is silly.

Where can you pull back?

Even small steps make a big difference. Spending $5 at the coffee shop near the office every workday is $1,200 a year. Make some coffee at home 2 or 3 days a week and you’ll have $500 to $600 more this year to invest, save or tuck away for next Christmas.

How many times have you resolved to do better after the New Year, spend less and save more? Make 2014 the year you really do it.