I'm a financial expert - here are seven golden rules to sort your money out in 2026: Sarah Coles

It's not all just about trying to get back on an even keel, because plenty of people want to build for the future too. One in five either want to start investing in an ISA or to invest more, and one in ten want to put more into their pension.

They’re all brilliant ambitions. Unfortunately, the same piece of research asked people for the longest period they’d every kept a financial resolution for and only a quarter had ever made one last all year. One in 20 said they’d never made a money resolution last more than a day. It means that to make them to stick it’s essential to follow the 7 golden rules of sorting your life out.

Work out where you stand

There will be problems you know about already, but you still need a full understanding of your finances to see if there are hidden issues too. The HL Savings & Resilience Barometer, for example, shows that households with average incomes might assume their weak point is that they’re spending too much, because on average they have just £113 left at the end of the month. They might also realise they need to save more, because fewer than half have enough emergency savings. However, it’s only by taking a snapshot of the bigger picture that they’ll see only one in five are on track with home ownership for their age and stage in life and fewer than half are on track for an adequate income in retirement.

Draw up a budget

It’s incredibly tempting to skip this step, because it’s tedious and stressful. However, you need a budget to form a solid foundation for the rest of your plans, or you’ll end up putting money into savings at the start of the month and then taking them out again to spend at the end.

You need a list of everything coming in and everything you’re spending. Your current account app is a handy took, along with your household bills. You can use apps, a spreadsheet or online tools - including a very comprehensive one on the Moneysavingexpert website. Then focus on where you can cut back so you end up with some money left over at the end of the month to put towards your top priorities.

Prioritise

If you try to do everything at once, you’re doomed to failure. There’s a rough rule of thumb of the order it makes sense to tackle things in, from drawing up a budget, to protecting your family, then paying down debts, sorting emergency savings, building towards near-term life goals, and then looking at pensions and investments.

However, we’re all different, and your own priorities will have emerged when you took stock of where you stood. You might, for example, be on track with debt and have started savings, but miles behind on pensions, and have no investments. In this case you might want to keep building your savings, but make a more concerted effort with your long-term planning.

Be specific

It’s easy to fall short, purely because we’re not clear about what we want to achieve at the outset. More than a fifth (22%) of people aged 18-34 say they want to get on top of their finances, but that’s an incredibly broad statement. You need to ask: Where do I stand? Where am I falling short? What can I achieve? For some people the real resolution is, to draw up a budget and stick to it, for others it will be to tackle debts, and for others it will be to learn about pensions and take steps to build for retirement.

Pledge to do just one thing

Sometimes the process of working out where they stand involves a fair amount of legwork, and everything from digging out paperwork to using calculators and getting in touch with banks. In that case, this should be the sum total of what you want to achieve when you make your New Year’s resolutions.

Then once you have achieved this, you can move onto your resolution for February - drawing up the budget. It may feel like a slow option, but getting one thing done well is far better than starting all of them and giving up.

Of course, this doesn’t mean you can abandon the bare minimum in the other areas of your finances. Don’t stop debt repayments or pension contributions while you get sorted. You need things to tick over while you take your time to make positive changes for the future.

Be realistic

Taking things one step at a time helps, but you also need to set realistic targets. If you’re carrying thousands of pounds worth of short-term debts, you’re not going to clear that overnight, and trying to do it too fast will mean you give up.

Automate everything you can

You don’t want to be in a position where you have to do the right thing every day, so try to make as many things automatic as possible. Whether that’s direct debits into savings, setting your pension contributions as a percentage of your earnings – so they automatically increase with a pay rise, or paying off your debt with a regular automatic payments, you’ll be doing the right thing without trying.

Celebrate your successes

It’s easy to focus on what’s left to do, but this step-by-step approach means you’ll have successes to celebrate along the way, to keep you motivated to continue. Marking a milestone doesn’t have to be expensive, it just has to be enjoyable.

Yorkshire debts

Yorkshire has the second highest monthly debt and interest payments in the country (after the East of England), according to the HL Barometer. Excluding the mortgage, those who have debts pay an average of £294 a month. At this time of year, balances and repayments are likely to be even higher. It’s one reason why January always seems to last for about six weeks.

If you’re wrestling with debts, the key will be to keep making minimum repayments, but to focus on repayment. There are two common approaches. The first is the avalanche method, where you repay the debts with the highest interest rates first. It means you pay less in interest and can clear your debt faster. The second is the snowball method, where you clear the smallest debts first and build to the biggest, so you have a sense of achievement. From a financial perspective, avalanches will always beat snowballs. But only you know what will work best for you.