Ten tips for improving your finances in 2025

If you made New Year’s resolutions for 2025, it’s quite likely that at least one of them was related to finances. According to YouGov, the single most common New Year’s resolution for 2025 is to improve finances, either by saving more or spending less.

If this sounds familiar, how is it going so far? Many New Year resolutions fall by the wayside within weeks – or even days – of starting. But the good news is that it is still early enough in the year to start again, and to begin to see some differences in your finances.

But how do you go about this? Many of us want to improve our finances but don’t really know where to start. 

With this in mind, here are ten tips that could help you to improve your finances in 2025. Even if you just choose a couple of them to work with, you could be more financially stable at the end of this year than at the beginning.

Create a realistic monthly budget

Many of us don’t have a monthly budget and just keep spending money until it runs out of it. This can result in depending on overdrafts and credit cards to pay for essential expenses, and lead to a spiral of debt. By creating a realistic monthly budget of income and expenditure, we can start to get on top of our financial situation and gradually bring things under control.

You can create a budget using an app, a computer spreadsheet, or a paper notebook. Whichever works best for you. The important thing is to record all your income and all your expenditure.

 Income is the money you know you have coming in – for example salaries, wages, allowances, benefits etc. Expenditure is everything you are likely to spend money on. There are two main kinds of expenditure – fixed and variable costs:

• Fixed costs include all regular payments such as mortgage/rent, household bills, subscriptions, and loan and credit card payments. 
• Variable costs cover everything else such as food and drink, clothing and toiletries, car and transport, childcare and childrens’ activities, pets, home maintenance and improvement, social and entertainment, and personal care and fitness.

Once you have created a budget, it then needs to be tested out over a couple of months to see how accurate it is. For example, there may be things that you have missed out, or you may be spending far more in some categories than you thought you were. But having a budget and checking it regularly will really help you to see where your money is going and where you may be able to make changes.

Make a plan to tackle your debt

One of the major expenses for many people is paying off debt, such as loans and credit cards. And this is one of the main areas to tackle when sorting out your finances. If you are struggling to pay off existing debts, you are likely to build up more debt and get into a vicious spiral. 

So the first thing to do if you are at all able is to pay off as much of your debt as you can. Even if this means dipping into savings it is worth doing. You may well find that the interest you are paying on debts such as credit cards and loans is higher than any interest you are earning on savings. It makes sense to get rid of the debt as quickly as possible and then you should have some money to be able to start saving again. 

If you don’t have money to make a significant dent in your debts, another good option is to pick one debt to tackle first and focus all your efforts on that one. Ideally go for the debt that is the most expensive in terms of interest, and do all you can to pay it off. You may be able to transfer the debt to a credit card or loan at a lower rate of interest, or set yourself fundraising challenges to pay straight into the debt. But chipping away at your debts one step at a time can really help.

If you are in the situation where you feel overwhelmed by debt, it is worth seeking professional help. There are various organisations who can provide information and support, and can talk you through some of the options available to you. For example:

• National Debtline
• MoneyHelper
• Citizens Advice
• StepChange Debt Charity

Stop relying on overdrafts or credit cards

We mentioned above the dangers of relying on your overdraft or credit card to see you through the month, but many people are in this trap. According to the debt charity StepChange, around 3 million people use their overdraft and credit cards to help with household bills. 

But both overdrafts and credit cards can be very expensive in terms of interest rates charged, so you can end up paying way more for your bills than you originally should. And if you are relying on your overdraft, this adds debt to your bank account even before you get paid.

A better option could be to take out a small affordable personal loan at a lower rate of interest to pay off your overdraft once and for all so that you don’t have that amount to cover every month. Then use your budget to live within your income each month going forward, so you don’t need to use your overdraft again.

Check if you are eligible for financial help

It is also worth checking whether you are eligible for any financial help, for example with cost of living expenses or childcare costs.

According to the organisation Policy in Practice, £23 billion of support went unclaimed in the UK in 2024. This equates to 8.4 million people potentially missing out on an average of £2,700 per year in support.

You can check whether you are eligible for support on Gov UK, for example:

Benefits and financial support

Childcare support

Track down forgotten money

According to the money tracing service Gretel, 2 in 5 of us have money available to us in accounts such as lost pensions, child trust funds and forgotten investments. This is estimated to be worth around £90 billion. Websites such as Gretel and My Lost Account can help you to track down any unclaimed money in UK accounts.

But there may also be forgotten money closer to home that you can put to good use. For example foreign currency that you never converted back, unused gift vouchers, or money in pockets or old purses and wallets. It’s definitely worth a good search of your home to see what turns up. Even a relatively small amount of money could help ease the pressure on your finances whilst you start getting them sorted.

Look for a better paid job

One obvious way to improve your finances is to find a job that pays more than you are currently earning. It may be time to look for something completely new. If this is the case, take a look at our recent article Is now a good time to consider changing jobs?

But if you enjoy the job and company you currently work for, it may be worth asking for a pay increase. This can seem like a difficult thing to do, but if you have not had a pay rise recently it could be worth a try. Put together evidence that supports your case for a pay increase – for example, if you have taken on any extra responsibilities or are working longer hours. Then find a good time to discuss the situation with your line manager.

Even if you are not given a pay rise immediately, the fact that you have asked, and have made a good case, could well work in your favour the next time promotions come up or salaries are reviewed in your company. 

Start up a side hustle

Another option worth considering this year is whether to make a bit of extra money this year by starting up some kind of side hustle. Under HMRC rules you can earn up to £1000 tax-free from a side hustle, which could make a good contribution to improving your finances.

Examples of side hustles include selling goods online, cleaning, DIY, odd jobs, babysitting, pet sitting or freelance admin work.

Find better deals on your bills

It’s easy to get into the routine of regular bills being paid every month by direct debit, but it’s always worth checking if you are getting the best deal possible from providers such as energy, phone, broadband, TV and various insurances. 

The best place to start is by contacting your current provider to explain that you are thinking of switching away from them to get a better deal elsewhere. This can often result in you being offered a better value deal so they keep you as a customer.

If you think you could still be paying less, start checking out other potential providers. Websites such as Compare the Market, USwitch or Money Supermarket can help with this. 

Also take a bit of time to check your bank account for any payments you are still making but no longer need. For example subscriptions, memberships and insurance payments. If you find that you are paying for things that you no longer want or use, then cancel them and put the money to good use elsewhere.

Start building some savings

One really important way to improve your finances is to build up some savings. This is not easy to do, particularly if you are struggling to make ends meet in the first place. Which is probably why 16% of UK adults – around 8.7 million people – have no savings at all, and 25% have £200 or less. 

So if you have little or no savings, you are not alone. But perhaps 2025 is the time for that to change.

Having savings to fall back on can be a tremendous help for any kind of unexpected expense or emergency. And of course, savings can be a positive way of being able to pay for treats, holidays or special events.

There is never a good time to start saving, so why not do it now? Start by opening a separate account for your savings so that they are kept apart from your day to day money, and you won’t be tempted to dip into them. Then set up a monthly direct debit to transfer money into your savings account. Even if this is a very small amount to start with, it doesn’t matter. The important thing is that you start doing it.

You can then supplement your savings by putting in bits of extra money as and when you can. For example bonuses, tips, gifts, wins, or refunds. You may also want to do occasional money-saving activities from time to time – such as no-spend challenges – to boost your savings.

Bit by bit your savings will grow. The two hardest parts are firstly getting started and secondly leaving your savings undisturbed. If you can do both these things, you are a saver.

Make the most of your pension

Closely related to savings are pensions. The state pension age is increasing from 66 to 67 between April 2026 and April 2028, and is scheduled to increase further to 68 between April 2044 and April 2046. But if you also have an employer’s pension scheme you may be able to receive it at a younger age than that.

And if you do have an employer’s pension scheme it is well worth making extra contributions into that scheme if you can. Your retirement may seem like years away, but if you can make extra payments into your pension now, you will pay less tax. This is because pension contributions are taken out of your salary before tax. So if you pay tax at 20% this means that 20% of your additional pension contribution will be money you are saving for your future instead of paying it in tax.

Whether or not you have an employer’s pension scheme, another option is to take out a private pension. This doesn’t have to be a huge amount of money, and you can pay into it by occasional lump sums and/or on a regular basis. The key advantages of a private pension is that you can access it earlier than state pension age (currently 55 but will rise to 57 from 2028) and can also withdraw up to 25% of it tax free. So even a small private pension could in future help you either to retire earlier or have some money for a lifelong dream.

We hope that this article gives you some ideas and inspiration about how to improve your finances in 2025. And if at any stage you need additional funding to help with this – remember that Loans 2 Go offer a range of personal loans – including loans for bad credit – which may be able to help.

For more helpful financial and lifestyle tips, visit us here again soon at Loans 2 Go.