'Don't Withdraw Money From Cash Machines': 5 Money Resolutions Britons Should Make For The New Year

As the New Year approaches, financial resolutions often top the list for Britons seeking a fresh start. Joe Lytwyn, a personal finance expert from Viva Money, has outlined five practical resolutions to help individuals improve their financial health in 2025.

From smarter budgeting to building a stronger credit score, these resolutions are designed to be both achievable and impactful:

1. Set Realistic Savings Goals

Lytwyn emphasises the importance of setting manageable savings targets rather than overambitious ones that may lead to frustration. He advises Britons to save what they can comfortably afford rather than adhering to rigid benchmarks.

'If your finances are already stretched, setting a strict target of £100 per month can feel overwhelming. Instead, focus on saving any amount you can manage. Whether it's £10 or £100, every little bit counts,' he explained.

According to statistics, one in six UK adults has no savings, making any progress a source of pride. Lytwyn suggests using these savings to work towards tangible goals, such as a holiday or home improvement project, to keep motivation high.

2. The Importance of Budgeting

Creating a monthly budget is one of the simplest ways to prevent overspending. While it may seem tedious initially, budgeting can become second nature over time.

Lytwyn recommends starting by calculating essential expenses such as rent, utilities, and groceries before determining how much disposable income remains. This leftover amount can be allocated towards savings or discretionary spending.

'It's normal to need a few attempts to master budgeting,' Lytwyn reassured. 'Don't criticise yourself if the first few months aren't perfect. Over time, budgeting will become a natural part of your financial routine.'

3. Review Your Direct Debits

Automatic payments can often drain finances unnoticed. Lytwyn suggests taking time to review all Direct Debits and subscriptions.

'Last year's gym membership you're not using? Cancel it. A streaming service you've forgotten about? Get rid,' he said.

Regularly reassessing these recurring payments can help Britons better understand their spending patterns and eliminate unnecessary expenses.

4. Understand and Improve Your Credit Score

A strong credit score is crucial for securing favourable loan, mortgage, and credit card terms. Lytwyn advises Britons to obtain a copy of their credit report to identify areas for improvement.

'Your credit score tells lenders how reliable you are in repaying borrowed money,' he explained. A high score can open doors to better borrowing options, while a low score may result in higher interest rates or rejected applications.

Building a robust credit history requires consistent effort. Paying at least the minimum monthly balance on credit cards and avoiding missed payments are essential. Lytwyn also warns against withdrawing cash from credit cards, as it can negatively impact credit ratings.

5. Avoid Using Credit Cards at ATMs

Using credit cards to withdraw cash from ATMs may be perceived as a sign of financial instability by lenders, Lytwyn noted.

'Keeping your credit card utilisation low is key to improving your credit score,' he said. Additionally, exceeding the minimum payment whenever possible demonstrates responsible financial behaviour and contributes to a healthier credit history.

With these five resolutions, Britons can take meaningful steps towards financial security in 2025. Lytwyn underscores the importance of kindness and patience when working on financial goals.

'Resolutions don't need to be overwhelming. Start small, stay consistent, and you'll be amazed at what you can achieve,' he concluded.