The six-step plan to help you get your finances in order this year

The start of a new year typically offers the chance for renewal in a number of ways - and increasingly, people are turning to their finances to ensure they are in order for the months ahead.

It’s more than just about making sure you are earning enough to meet your expected needs, though. Research from MoneySuperMarket suggests up to 15 per cent of Britons might run out of money before their January pay day, and it can be tough to recover from that early setback if you don’t have a plan in place.

A thorough run-through of your money situation can make a big difference, and it doesn’t need you to spend hours poring over receipts, bank accounts and calculators either.

Here’s a checklist of six things you should do, some of which can take only a few minutes but give you brilliant peace of mind.

First things first: you need to know exactly how much you’ve got coming in and going out each month. Bank or finance apps will mostly tell you this pretty quickly now, but you might need to double-check where some expenses are assigned.

Whether it’s through salary, benefits or other income, make sure you know how much lands in your main account and when. Then, if you’re able, look back over your last few months of spending, tot up whether they are imperative costs (such as for housing and bills), regular expenses (food and other things you need), your discretionary spend (socialising, personal shopping, eating out and so on) or something else like savings.

First, the income number needs to be higher than the total expenses.

If it’s not, reduce your outgoings immediately; raise your income if you’re able.

Once the numbers balance the right way, you can look at where extra money can go. This task might take a little longer than the others, but it’s the foundation of everything that comes after. For a more comprehensive look at how to effectively budget, look here.

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So, you know how much comes in and how much goes out. The difference between those numbers is what helps you improve your financial resilience: the ability to absorb surprises when they crop up without overstretching or going into debt.

For those who have some money - even a little - left over after monthly spending, there are a few key things.

First is any high-interest debt. This could include credit cards for example, or loans that are not mortgages. Always check terms to ensure you won’t be penalised for paying anything off earlier or faster, but the more you can contribute towards paying down any debt you owe, the better you’ll be in the long run as you’ll pay less interest on it.

It’s easy to feel like most of your money is gone as soon as it lands in your bank, but it’s vital that people put a little away each month.

Research from the Financial Conduct Authority (FCA) found a fifth of Brits (21 per cent) have less than £1,000 they could get hold of in an emergency, while one in ten (10 per cent) have nothing saved at all. It’s crucial to build this savings safety buffer first before you do anything else with your spare cash - otherwise it’s more likely you’ll end up spiralling around, never having money to pay sudden expenses, and always feel like you’re playing catch-up.

Money experts recommend eventually saving at least three months’ worth of costs, and up to six months, depending on circumstances like your job or dependents.

You want a main easy access savings account first of all, and for many, the best product to use might be a cash ISA: it’s simply a normal savings account, which you will never pay any tax on the interest earnings.

Other people might want multiple accounts or “pots” to differentiate between emergency savings and cash dedicated toward specific things, like a holiday or house deposit, or even planning for Christmas 2026. Little amounts add up significantly when given consistency and time.

Check how much you’re already putting away and alter that according to your needs - or divert some towards other things.

If you’re on universal credit, check out Help to Save.

This won’t take long at all: check maybe once a year on your current pension position and ensure you’re on track.

For the state pension, here’s everything you need to know. You can check potential earnings, identify missing years and more on the government website.

For workplace pensions, track down all your old ones - the forthcoming pension dashboard should make this a lot easier if you haven’t already done it. Consider whether you can up your current salary sacrifice if you are on that scheme. Even an additional 1 per cent can make a massive difference over decades, especially before the new tax on it comes into effect in 2029.

If you have personal pensions, check those too, and if you don’t, consider whether you could set aside a little money to begin one this year, even if it’s only a small amount each month. If you’ve still got decades of work ahead of you, there’s time for it to make a big impact in retirement.

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Investing will once again be a buzzword for Brits in 2026, and a big campaign is coming to raise awareness.

But here’s the main deal: over the long term, you’re more likely to earn bigger returns through investing in the stock market and other assets than you are through cash savings alone.

You need to make sure you’ve got that savings plan well underway first, and you can set up automatic investments if you don’t want to have to do anything yourself - very much like a pension, in fact.

Using a stocks and shares ISA is the most tax-efficient way to invest if you haven’t used up your annual allowance.

Finally, if you’re a homeowner, it’s worth checking in on your mortgage. Interest rates have come down significantly over the past year, and around 1.8m fixed-term deals are expected to come to an end during 2026.

You can lock in deals ahead of time, usually once you’re in the last six months of a term. Factor in fees, length, whether you can overpay and other details, as well as the headline rate, and get a broker to help you decide the best product whenever possible.

If your deal is longer-lasting then you can still look into whether you can make any overpayments if yours allows it, and whether you’d be better off doing this or investing, putting spare money into a pension or something else entirely.