12 WAYS TO BEAT THE BILLS

THE new year is the perfect opportunity to take stock of your finances and the arrival of 2026 gives more reason than most.

- Consumer Editor KATIE ELLIOTT

With a round of tax hikes and allowance cuts on the way, the year ahead will bring a new set of challenges.As the cost-of-living crisis drags on into another year, being proactive now can help you manage your budget and make your money work harder this year and beyond. The following 12 top tips will help.

1 BUILD A RAINY DAY FUND:A rainy day fund is the key to financial security - and 2026 is the year to either start one or strengthen what you have. "It starts with understanding what you can afford to save each month," explains Adam French, head of news at Moneyfactcompare.co.uk. "Begin by tracking your income and essential expenses, then work out a realistic amount to set aside, whether that is 1% or 20% of your income, it all counts. Once you've settled on an amount, make it automatic by setting up a direct debit or standing order to transfer savings as soon as you get paid. This removes the temptation to skip a month." French adds: "Research easy access accounts or regular savers with high interest rates, and watch out for withdrawal limits or penalties. As it's your emergency fund, it should be easy to access."

2 PAY DOWN DEBT:Debt becomes more expensive the longer it’s left, so tackling it early in the year can help secure long-term savings. Jacqui Hamilton, consumer affairs expert at Experian, recommends what she calls the “avalanche method”, which helps save money on interest and clears your balance faster. "Start by identifying which debts carry the highest interest rates. Focus on paying those off first while continuing to make at least the minimum payments on your other accounts. Once the highest-interest debt is cleared, move on to the next." Hamilton adds: "Reducing overall debt frees up your finances but also improves your credit score, making it easier to access better rates and products."