From saving money to clearing debt to investing, many people use the start of a year to set money goals. This article sets out some common approaches to budgeting, saving, earning extra income, paying down debt and investing.

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Saving and budgeting

1. Create a budget

If you've never made a budget before, it can feel like a lot to take on. Francesca, who shares budgeting and saving tips on Instagram as The Money Fox, described how she suggests getting started.

She said: “Write out your income firstly, then your fixed expenses - these are the ones that don't tend to change from month to month, like your mortgage or rent, and these can easily be found in the direct debits section in your online banking.

“Then list out your variable expenses - so things like groceries, car fuel, kids’ expenses, beauty, restaurants/takeaways, miscellaneous expenses.

“The variable expenses are where most people trip up as they are usually frequent payments and you don't realise how much they are adding up throughout the month.

“Get very clear and specific on the goal that you want to achieve. I think most people would want to save more money or make more money, but being specific e.g. save £10,000 this year, will give you a lot more direction.”

With your expenses and goals listed, you can decide how to allocate your money.

For context, the Office for National Statistics' latest Family Spending in the UK release (published June 2026, covering April 2024 to March 2025) found average household spending of £676.60 a week, around £2,930 a month. Housing (net), fuel and power made up the largest share at 18%. These are UK-wide averages across all household types, so your own costs may be quite different. Our average UK household budget article breaks the figures down by category.

It can help to review your budget regularly, as your income and outgoings may change during the year.

2. Save for known costs

A sinking fund is money you set aside regularly for a cost you know is coming. It can help you plan for expenses such as Christmas, birthdays, travel to a wedding or a holiday, rather than putting them on a credit card.

To set one up, list the costs you expect over the next 12 months and add them up. Then divide the total by the number of months until you need the money. For example, £1,800 of expected costs over 12 months works out at £150 a month.

You can compare savings accounts in our savings accounts guide. Rates change often, so check the provider's own page before you open an account.

3. Build an emergency fund

Unexpected costs, such as a broken boiler, a car repair or a drop in income, can happen to anyone. An emergency fund is money set aside to cover them.

Francesca suggested starting small: "You could start small by putting your change into a jar, or maybe challenge yourself to every £1 coin or £5 note that you have, you put into your savings pot."

Some bank accounts and savings apps, for example Plum, offer a round-up feature that rounds card purchases up to the nearest pound and moves the difference into savings. Features and any fees vary by provider and plan, so check the details before signing up.

Keeping your emergency fund separate from your everyday account and from other savings goals can make it easier to keep it for emergencies.

4. Look for everyday savings

Reviewing regular outgoings, such as subscriptions, food shopping and household bills, can free up money in your budget. Our guide to subscription traps explains how to spot subscriptions you no longer use.

Earning extra income

1. Start a side hustle

Some people take on a side hustle to earn extra income or test a business idea alongside their main job. Examples include delivery or ride-hailing driving, pet or house sitting, babysitting, freelancing, tutoring, mystery shopping and paid surveys. Our article on ways to earn extra money before Christmas lists more ideas, and many of them apply at any time of year.

If your gross income from self-employment or casual work is more than the £1,000 trading allowance in a tax year, you'll need to register for Self Assessment and declare it to HMRC.

2. Sell unwanted items

Selling things you no longer use can raise some cash. Clothes are commonly sold on online marketplaces such as eBay, Vinted and Facebook Marketplace. People also sell kitchen appliances, furniture, electricals, collectibles, tools, gym equipment and cars.

Trade-in services such as musicMagpie buy books, CDs and DVDs, and Zapper buys CDs, DVDs and games. Prices per item are often low, but they can add up across a large collection. Compare what different sites offer before you sell.

Car boot sales and local table-top sales are other options for selling in person.

Clearing debt

If you have debt, small cutbacks on their own may not be enough to make a meaningful difference. It can help to look at what you owe, the interest rate on each debt, and how much you can afford to pay each month.

One option some people use is a 0% balance transfer credit card. You move existing card debt to a new card that charges no interest on the transferred balance for a set promotional period. Most balance transfer cards charge a fee, usually a percentage of the amount transferred, which is added to your balance. The 0% rate usually applies only to the transferred balance, not to new purchases or cash withdrawals. You can lose the promotional rate if you miss a payment or go over your credit limit. Some cards advertise "up to" a set number of months, and you may be offered a shorter period.

Applying for a credit card involves a hard search on your credit report, which can affect your credit score. Eligibility and acceptance are decided by each lender and depend on its own criteria and checks. Checking your eligibility doesn't guarantee that you'll be accepted. Before taking on any new credit, make sure you can afford the repayments.

Our guide on how to compare balance transfer credit cards explains what to look for and includes a table showing how long it takes to clear different balances at different monthly payments. We also compare 0% credit cards and personal loans.

If you're struggling with debt, free and confidential advice is available from organisations including Citizens Advice, National Debtline, StepChange and Christians Against Poverty. GOV.UK lists free debt advice organisations and links to MoneyHelper's debt advice locator for more options.

Always make sure you can afford repayments.

Investing

The value of investments can go down as well as up, and you may get back less than you put in. Past performance isn't a reliable guide to future returns.

Investing in assets such as shares and bonds carries more risk than holding cash in a savings account. Unlike cash deposits, investments aren't protected by the FSCS if their value falls. Only invest money you can afford to leave invested for the long term and could afford to lose.

If your investment returns are reinvested, any future growth applies to your original money plus those earlier returns. This is known as compounding. Compounding also works in reverse when values fall.

Inflation affects cash savings too. If your savings rate is lower than inflation, your money buys less over time. Consumer price inflation was 3.1% in the 12 months to August 2026, according to the ONS. That's down from a peak of 11.1% in October 2022.

Ways to invest include funds, which pool money from many investors and are run by a fund manager or track an index, and buying individual shares through an online investment platform. Platforms usually charge fees, for example an account fee and dealing charges. Generally, investments with the potential for higher returns carry higher risk.

ISAs

Individual Savings Accounts (ISAs) let you save or invest without paying UK Income Tax or Capital Gains Tax on the returns. In the 2026/27 tax year, you can pay in up to £20,000 in total across a cash ISA, stocks and shares ISA, Innovative Finance ISA and Lifetime ISA. Up to £4,000 of that can go into a Lifetime ISA (GOV.UK).

The government has announced changes from 6 April 2027 (GOV.UK):

• The amount people under 65 can pay into cash ISAs each tax year will fall to £12,000. The overall ISA allowance stays at £20,000, so the rest can go into other types of ISA or simply not be used. The full £20,000 cash limit will apply from the start of the tax year in which you turn 65.

• People under 65 won't be able to transfer money from a stocks and shares ISA or Innovative Finance ISA into a cash ISA.

• A flat 22% charge will apply to interest paid on cash held within stocks and shares and Innovative Finance ISAs.

Tips to stay on track

There are several ways to try to keep money goals on track.

• Setting specific, realistic goals and checking your progress regularly.

• Including spending on socialising and other non-essentials in your budget, so it reflects how you actually spend.

• Keeping up to date with personal finance news and changes to rules such as ISA limits and tax allowances.

• Marking milestones along the way, in a way that fits your budget.

Read more:

• Average UK household budget

• Subscription traps: how they work and how to avoid one

• Ways to earn extra money before Christmas

• 5 simple steps to set your money goals

• What is a balance transfer?