The start of a new year often brings a sense of renewal, a chance to hit the reset button. Whether your finances have taken a backseat this year or you’re just looking to build on good habits, now’s the perfect time to take stock and set yourself up for a healthier financial future. Here’s how to get your finances on track and headed in the right direction.
Take stock of where you are now
Before rushing to make any changes, you need to understand what you have and where your money is currently going. This means taking a deep dive into your spending, savings and debts.
Start by reviewing your bank activity for the last three months. Check where your money’s being spent – are there any patterns or subscriptions you could live without? Once you have a clearer picture of your outgoings, you can make informed decisions about where to tighten your belt or allocate more funds.
For example, if you’re spending too much on takeaways or daily coffees, it might be time to make small cuts. This can free up money to pay off debt or put into savings without feeling like you’re making huge sacrifices.
Choose your financial goals for next year
Now that you know where you stand, it’s time to set specific financial goals for the year ahead. Whether it’s paying off your credit cards, building an emergency fund, starting to invest or saving for a home deposit, set clear, measurable goals that are realistic for your situation. Write them down, so you have something concrete to work towards.
For example, if you’re aiming to pay off £2,000 in credit card debt, break it down into manageable monthly payments. Instead of focusing on the total amount, focus on the small victories, like paying off £200 a month. This makes the goal feel more achievable.
If you want to do more with your money, think about how you can make it work harder. Financial management experts could help you come up with a plan to work towards your long-term goals, whether it’s retirement or a big purchase.
Build and reinforce your financial foundations
Good money management needs a solid foundation – and yours might look different to someone else’s. You might need an emergency fund and the right kind of savings accounts or investments in place to support your lifestyle.
If you haven’t already, consider setting up a direct debit to put a fixed amount into your emergency savings every month. Even £20 can add up over time, providing peace of mind. Likewise, review your core outgoings to make sure they’re serving you well enough.
Adapt to the changing financial landscape
2026 will likely see changes in government policies, so it’s important to stay informed. Take note of all the changes brought about by the autumn budget this November, many of which will influence your plans in 2026. There will probably also be changes in interest rates and other things, as we’ve seen in recent years.
For example, if interest rates rise, you may need to reassess your mortgage or loan payments to avoid falling behind. Similarly, if there’s a tax increase, you might need to adjust your budget to account for higher living costs.
Keep an eye on the news that could affect your finances and be prepared to make small adjustments as needed. Stay flexible and responsive to external factors, so you’re not caught off guard.
Stick to your plan and review regularly
Your financial situation could change throughout the year, so it’s essential to review your progress regularly. Every three months, check in on your budget and goals. Are you on track? If not, what’s stopping you? Making small tweaks to your plan as you go can prevent feeling discouraged later.
Starting the year with a solid financial plan means you’ll set yourself up for success, but also enjoy greater confidence when it comes to managing your money.
