FOCUS ON Money makeover

The New Year is the perfect time to review your finances, so set your goals for 2025 with our handy tips

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HOW TO... clear debts and start saving

Being in debt can feel daunting, but there is a way out if you sit down and make a plan...

• Never bury your head in the sand, as debt won't go away on its own. Make a list of everything you owe - high-interest credit cards, store cards, student loans, car finance, mortgage, rent and so on. For each debt, note down the minimum monthly payment and due date. Now work out the minimum monthly total you need to pay to stay on top of it all - and stick to it.

• Set up direct debits or standing orders so you never miss a payment, and make sure there's always enough money in your account to avoid overdraft fees.

• Make a note of monthly must-haves such as food, household bills, broadband and mobile, and add this to your monthly debt to work out how much money you need to have in your account to cover each month.

• Next, look for ways you can cut back on spending by creating a monthly budget for things like food, hobbies, and going out. Cancel any direct debits, standing orders or subscriptions that you never use - a TV streaming service or gym membership, for example.

• Look at comparison sites to see if you can get better deals on broadband, gas and electric, car insurance and so on, freeing up money to put towards your debt.

• Credit counsellors can give helpful advice on debts and budgeting, with debt-management plans to get lower interest rates, extend repayment periods, or even waive fees. Debt consolidation helps by combining several debts into one, with a single interest rate.

• Once you're in control of paying off your debt, you can think about saving. Budgeting apps such as Goodbudget and Moneyhub are really useful, as they allow you to see all your finances securely in one place.

• Increase your cashflow with a side hustle such as babysitting, dog walking, or selling clothes on Vinted.