The new year is an ideal time to review your finances, according to experts. With bills rising and taxes remaining high, making your money go further does not necessarily require a second job or extra hours. Changing spending and savings habits can help you achieve a financially healthy 2025.
Joshua Gerstler, chartered financial planner at The Orchard Practice, advises getting a grip on expenditure. “Take a look at all your direct debits and standing orders to see if there are any services such as gym memberships or streaming subscriptions that you don’t use,” he says. Wesley Harrison, head of financial planning at wealth manager Benchmark, recommends writing down regular expenses to reveal potential savings and using banking apps to automate tracking.
Building an emergency fund is crucial. Philip Dragoumis, director at Thera Wealth Management, suggests having six months of expenses in an accessible savings account to cover unexpected events like a boiler breakdown or job loss. Beyond emergencies, setting savings goals for holidays, a mortgage deposit, or a wedding can help you choose the right account, whether a cash ISA for tax-free interest or a stocks and shares ISA for higher returns.
Insurance products such as income protection, critical illness cover, and life insurance can safeguard your finances if you lose your job or become unable to work. Gerstler notes that having protection in place helps maintain your standard of living during difficult times.
Finally, starting a pension early can significantly boost your retirement pot, thanks to government tax relief on contributions. The earlier you begin, the more time your investments have to grow and recover from market losses.
