As we approach the end of 2025, it’s a good time to review our financial situation, especially with Christmas approaching. Planning ahead for 2026 can set the stage for a financially sound New Year, where you can focus on being money-wise, increasing your income, saving where possible, and improving your overall financial position.
Many individuals often resort to using credit cards to cover Christmas expenses, leading to debt in January. This situation can be exacerbated when December pay comes early, and one must stretch it over the holiday period and a long wait until the next paycheck in January.
If you’re feeling the financial strain during the festive season, consider ways to minimize costs. Utilize cashback websites, supermarket loyalty points, vouchers, and online discount codes to save money. Platforms like Groupon and Wowcher can also help you cut down on expenses when shopping online.
There’s still time to switch your current account to a bank offering a financial incentive, potentially earning you up to £200 by the end of January.
When shopping for gifts, remember that it’s the thought that counts. Discuss setting spending limits with friends and family or opt for a Secret Santa exchange to reduce the number of gifts you need to buy. Alternatively, engage in a thrift challenge by exploring second-hand items, such as those available at CEX, especially if you trade in old items for vouchers.
Setting financial goals for 2026 is essential despite the current cost of living challenges. Looking towards the future, consider long-term investment planning, even if it means starting small, like investing £10 monthly into a Stocks and Shares ISA.
Differentiate your goals into savings and income-boosting objectives. Saving goals involve determining how much you want to save annually and setting aside a monthly amount to achieve that target. On the other hand, make goals focus on increasing income through side hustles, bank switches, referral bonuses, and seeking pay raises at work.
Having distinct savings and income goals allows for a structured plan. It enables you to determine additional monthly savings based on your income-boosting efforts rather than solely relying on current finances, expenses, and income.
Prioritize paying down debt while working towards your financial goals for 2026. Strategies like consolidating credit card debts onto a 0% balance transfer card can significantly reduce interest payments, giving you more breathing room to pay off the principal amount.
Explore various savings challenges to find one that aligns with your preferences. Group challenges or incremental savings methods, like the snowball technique, can help you develop a saving habit and stay motivated throughout the year.
Consider opportunities to increase your income, including utilizing current account switches, online surveys, and government-backed schemes like Help to Save. This program, previously limited to certain Universal Credit recipients, now extends to anyone on Universal Credit earning at least £1 within an assessment period.
Invest in quality items that offer long-term benefits and savings, such as energy-efficient appliances or durable homeware. Small changes in spending habits, like buying second-hand items or using cashback websites, can lead to significant savings over time.
Remember that achieving big financial goals requires patience and consistency. Focus on making small, sustainable changes that align with your long-term objectives, whether it’s saving for a specific goal or increasing your income through various avenues.