Five steps to financial fitness in 2025
January 3, 2025
With just a few small changes, you can shed some of that Christmas debt and get your bank balance back in shape.
- Start budgeting
It’s easy to lose control of your spending. Often, we use contactless for the small purchases, and these are the small spends that add up to a large portion of our outgoings. Start by understanding where your money is leaving your bank account, and you’ll see where you can make savings. Even small changes in behaviour can make a difference.
Know what’s coming in and list each of your essential outgoings. These are the expenses you must pay every month, for instance, your rent/mortgage, loan repayments or childcare. After your essential outgoings have been identified, see how much money you have left over when you deduct these essential outgoings from the money coming in. Out of what’s left, what can you afford to put aside for a rainy day?
Use our budgeting tool to help with this.
Carry out an audit of your direct debits. Are you still paying for a streaming platform that you never watch, or a gym membership that you never use? This is a good time to think about what you are using and where you can make savings.
- Switch credit cards or mortgage lender
Currently, interest on the purchases you make by credit card ranges from just under 14% to nearly 23%, depending on which card you choose. That’s a huge difference. If you are on an older card, you could be paying even more. Switching to a lower interest rate will save you money and is very easy to do.
You can sometimes transfer your balance for an introductory rate, which can be a great way of paying it off, if you can resist using the card again.
Our credit card comparison tool has all the current rates, along with an easy-to-use calculator for you to check how much you can save.
While you’re thinking about switching, if you’ve got a mortgage, moving to a cheaper rate can save a small fortune over the lifetime of the loan. Our mortgage switcher tool can give you an idea of the savings available. If you are on fixed rate, you should check if there are any penalties for exiting that rate earlier than agreed. If you have any doubts, get financial advice or visit a mortgage broker.
Top Tip
Many banks provide incentives for switching which can support costs such as solicitor fees if you decide to move your mortgage.
- Save small and often
You never know when you’ll suddenly need extra money, and it’s impossible to be prepared for everything. But having a bit of money put aside can save you from needing to take out a loan or rely on your credit card, if you are faced with an immediate cost that’s above your usual day to day outgoings.
The best approach to savings is to do it regularly and to stick to what you can afford. There’s no point in building up debt to help you to save.
Check with your bank to see what kind of savings products they offer. Some financial services have ‘rounding up’ tools for you to put aside your spare change. For example, if you spend €3.20 on a coffee, 80 cent is transferred to a savings account, because this is how much change you would have received if you’d handed over €4. You’d be surprised at how quickly this adds up.
- Shop around for renewals
It’s tempting to stick with the same provider when your policies come up for renewal. But you can save money by shopping around and checking that are getting the best deal. If you like your provider and want to stay put, that’s fine – but ask them can they offer you a better deal.
Switching will save you money for utilities too. Providers offer the best deals for new customers and once you’re out of contract, you might find that you have been moved onto a much higher tariff.
- Complete your yearly tax return
Many people qualify for tax back from Revenue by submitting an annual tax return. The process is quick, free and can be accessed through your Revenue MyAccount. If you are a Pay as You Earn (PAYE) taxpayer, you can submit a PAYE Income Tax Return to claim additional tax credits, reliefs or expenses.
If you qualify for additional credits or reliefs for last year, then the amount of tax you were due to pay is reduced, which means you will get a refund of some of the tax you paid.
Renters can claim a Rent Tax Credit of up to €1,000 (or €2,000 if you are jointly assessed) for 2024. You can claim back 20% of your medical expenses, and a small portion of your utilities and broadband if you worked remotely in 2024. Read more about tax credits.
Top Tip
If you have never submitted a tax return before, you can file for the previous four years’ worth of returns. Several tax back agencies can assist you with this service (although they will charge a fee).
