By Simon Lambert
I have never been particularly fond of New Year’s resolutions. Life already comes with a long list of things I should be doing more consistently exercising more, replying to emails faster, sorting out paperwork without voluntarily adding extra pressure to the mix.
Recently, however, I came across an idea that resonated with me far more than the rigid concept of resolutions: setting intentions instead. A resolution often feels like a make-or-break promise. Miss it once and it feels like failure. An intention, on the other hand, is gentler and more realistic. It means aiming to do better, accepting that you may stumble, and committing to keep going anyway.
For many people, financial health sits high on the list of intentions for the year ahead. You might reasonably assume that after more than twenty years working as a financial journalist, I would have my own money affairs running like clockwork. The truth is rather more humbling.
Ironically, I was far better at managing my finances when I earned less. Back then, I had more time, fewer commitments, and a sharper focus on where every pound was going. Today, juggling work, family life, and everything in between, much of the financial admin gets pushed onto an ever-growing mental to-do pile.
That pile currently includes overpaying for broadband, failing to properly review our household budget, and leaving a jumble of investments in my stocks and shares ISA largely untouched. My intention for 2026 is simple: to finally get on top of it all.
If you share that goal, my advice is to avoid trying to fix everything at once. The real enemies of financial progress are procrastination and overcommitment. Instead, start with a manageable checklist of essentials. Once the foundations are secure, you can focus on building wealth and making your money work harder.
Here are my seven essential steps to getting your finances onto a sound footing.
1. Take Control of Your Household Budget
Most of us have a reasonable idea of what comes into our bank account each month. Far fewer could confidently explain where it all goes.
Budgeting may not sound exciting, but it is the cornerstone of financial control. Until you know how much you spend and on what it is impossible to make informed decisions about saving, investing, or even enjoying your money guilt-free.
Creating a clear budget allows you to spot waste, identify areas where costs can be reduced, and calculate how much disposable income you truly have. Over the past year, I have found it particularly helpful to transfer a fixed amount each month into a separate account for day-to-day spending. When that pot runs low, it sends a clear signal to rein things in.
A budget doesn’t have to be perfect; it just has to be honest.
2. Review and Reduce Your Bills
Once your budget is laid out, your regular bills will be impossible to ignore and that is a good thing.
Broadband, television packages, energy tariffs, insurance policies, and mobile phone contracts are all areas where loyalty often costs money. Many people pay far more than necessary simply because switching feels like a hassle.
Make a list of your essential outgoings and challenge each one. Ask whether it could be cheaper, renegotiated, or cancelled altogether. Subscriptions you barely use can quietly drain hundreds of pounds a year.
Small savings across multiple bills quickly add up and free cash for more important financial goals.
3. Tackle High Interest Debt Head On
If you carry debt with a high interest rate such as credit cards, personal loans, or car finance clearing it should be a top priority.
Start by listing every debt you have alongside its interest rate. Then explore whether it can be moved to a lower-cost option, such as a 0% balance transfer credit card or a cheaper personal loan. Lower interest means more of your monthly payments go toward reducing the balance rather than lining the lender’s pockets.
Debt repayment is rarely quick, and it often requires patience over months or even years. Automating payments immediately after payday can help maintain momentum. Clearing debt may not feel glamorous, but it is one of the most powerful steps toward long-term financial freedom.
4. Build a Proper Rainy Day Fund
An emergency fund is not a luxury it is a necessity.
The general rule of thumb is to hold between three and six months’ worth of essential expenses in easily accessible savings. That figure can sound intimidating, but remember it is based on core costs such as housing, food, and bills, not your full pre-tax income.
Even a modest emergency pot can make a huge difference if the unexpected happens, whether it is a job loss, a sudden repair bill, or an illness. The key is to keep this money separate and resist dipping into it for holidays or everyday spending.
A flexible cash ISA with competitive interest rates is often a sensible home for emergency savings.
5. Treat Pension Saving as Non Negotiable
Saving for retirement should be viewed as a fixed monthly expense, not something you do only if there is money left over.
If you are employed, ensure you are enrolled in your workplace pension and contributing enough to receive the maximum employer contribution. Failing to do so is effectively turning down free money.
For the self-employed, the responsibility rests entirely with you. A self-invested personal pension (SIPP) can offer flexibility and tax advantages, but the most important thing is simply to start and contribute regularly.
Time is one of the most powerful forces in investing, and the earlier you begin, the easier retirement saving becomes.
6. Make Sure You Have a Will
Despite its importance, writing a will remains something many people put off. It is often quicker, simpler, and cheaper than expected and it is essential if you have children, a partner, or anyone who depends on you financially.
Without a will, your assets will be distributed according to intestacy rules, which may not reflect your wishes at all. While a solicitor offers the strongest protection, reputable online services and will writers can also be suitable for straightforward circumstances.
I delayed writing my own will for far too long, including during years when I already had children a clear example of how procrastination can override common sense.
7. Put Lasting Power of Attorney in Place
Lasting Power of Attorney (LPA) is often associated with old age, but it is relevant for adults of all ages, particularly parents.
An LPA allows you to appoint trusted individuals to manage your finances or make medical decisions on your behalf if you are unable to do so. There are two types: one covering property and financial affairs, and another covering health and welfare.
Without an LPA, your family may struggle to access accounts, pay bills, or act quickly in a crisis. Setting one up is relatively inexpensive and can be done online through official government channels.
Final Thoughts
Getting your finances on a sound footing does not require perfection, complex strategies, or dramatic sacrifices. It starts with intention, realism, and a focus on the essentials.