Best financial new year’s resolutions if you’re really struggling

It’s still tough out there. If you can barely afford to keep the lights on, increasing your pension contributions or setting up a stocks and shares ISA is probably the last thing on your mind. But that doesn’t mean you can’t make new year’s resolutions to boost your financial wellbeing.

Setting achievable financial goals

Our five favourites:

Make a budget

It might sound boring, but this one is key. Unless you know exactly where your money is going, you’re always going to be doing your maths in the dark. Our free budget planner will help you list all your income and then separate your expenses into different pots – rent, gas and electric, water, food, transport and socialising. The goal is to work out where you can cut back not to set an unrealistic plan you won’t be able to stick to. Find out what our writer Gabrielle thought of the budget planner when she tried it herself.

Cut unnecessary spending

Once you’ve created a budget and you can see in black and white where all your money is going, you might spot areas where you can cut back. Cancel unused subscriptions, consider switching utility providers or look at ways to cut the cost of your weekly shop.

Pay down high-interest debt

If you have any disposable income after covering essentials, before you even think about saving, try to get rid of your high-interest debt. Credit and store cards often charge annual interest of over 20%. This is a major drain on your finances. You might have heard of the debt avalanche method – this involves putting any spare money onto the debt with the highest interest rate first. This could help reduce the amount you repay overall.

Build an emergency fund

Once your debts are under control, try to save up a small amount for a rainy-day fund. This will prevent you from getting dragged back into using high-interest credit if you face unexpected costs, like boiler or car repairs.

Get advice

If you can’t afford to repay your debts, get professional advice. We’ll make sure you’re claiming all the financial support you’re entitled to and look at ways to reduce your monthly debt repayments. You might be surprised at the amount of help available.

Sticking to your financial new year’s resolutions

Our steps to success:

Specific and sensible

Make goals precise and realistic. Instead of something vague like “start saving” or something overly ambitious like “save £50 a week”, try “save £5 a week”. Don’t set yourself up to fail. Better to start small and build momentum. £5 a week might not sound much, but by the end of the year, you’d have a rainy-day fund of £260. That’s £260 of wiggle room, you didn’t have before.

Automate your payments

Set up automatic transfers for your bills and debt repayments. If you can schedule these a day or two after your income lands, even better. This will make it easier to see how much money you have left to play with after you’ve ticked off the essential debts and bills. And it can also help you avoid those pesky late fees.

Celebrate your successes

Whether you prefer an app, a spreadsheet or a notebook, monitor your progress. Celebrating every small win helps to maintain motivation.

Share your goals

Telling friends and family members about your financial goals will make it easier to say no to expensive social events or suggest low-cost alternatives. A trusted confidant can also offer support and hold you accountable should you be tempted to give up.

Boost your income

Consider whether you could boost your earning potential by taking a course or learning new skills. And with an estimated £24bn in benefits and social tariffs going unclaimed every year, it’s also a good idea to make sure you’re not missing out.

And if you mess up?

If you slip up along the way, just remember, there's nothing to stop you starting again in February. Or March. Or April... You get the idea.