5 ways to reset your finances in 2026

A financial expert explains that the New Year can provide optimism and a new approach for when it comes to managing your money.

There are simple ways to have a financial reset this year (Alamy/PA) (Alamy/PA)

With the New Year in full swing, it’s a time when a lot of people are aiming for resets in their life whether it be financially, mentally or physically. Tackling your finances can be a challenging task, but a fresh year can be a great time to get on top of them.

We spoke with head of money at personal finance app Plum, Rajan Lakhani, to explain the importance of having a financial reset and some simple ways to do it.

“Having a financial reset is an opportunity where if you haven’t been managing your finances in a way that you would have wanted to, you can actually start again and start putting into place the behaviours and actions that will then put you in a much stronger position moving forward,” Lakhani explains.

“The New Year can sometimes provide optimism and a new approach. It’s an opportunity for people to know there are ways out.”

Check your balance

Lakhani says the most important thing whenever people are doing a financial reset is actually knowing where they stand and getting an overview of their finances. “That begins with looking at your bank account and seeing what money you’ve got,” he says. “Check your savings account and see how much money is put aside. Also check any debts you may have and check this against what you are spending on a regular basis.

“A lot of this information will be available through your bank statements. Another quick way of doing this is connecting your bank account to a financial app and then you can look at what you’re spending on. Then from having that overview, you know where you stand and you can begin to take the right actions.”

“The key thing with this point is not to be fearful because knowledge is power.”

Look at the payments you are making

“Another key thing to do is check and consider what subscriptions you have,” Lakhani says. “When it comes to streaming for example, it’s challenging now because there are so many organisations, so it’s really important to work out what streaming platform you’re actually using on a regular basis.

“There are some that you might have forgotten. The government did some research that found that the cost of forgotten subscriptions is £1.6 billion a year. Another one that comes up quite often at the start is the year is when people join the gym and then after a few months, they might start not going regularly but are still paying for the subscription.”

Check what payment plans you’re on

“You can also check if you are on the right payment plans,” Lakhani adds. “For example, Netflix and Spotify have different plan options, some of which come with adverts. Some want you to pay the extra money to avoid the ads but you need to ask yourself if that will help you with your finances moving forward.

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“It’s really important to make sure that you’re picking the right plan for you and your circumstances. If you are going to continue to pay for it, also make sure you’re paying for it the right way.

“Sometimes you get a discount if you pay up front and there are also gift vouchers available. So, making sure that you know you are using that money in the right way and making the most of your subscriptions as well.”

Try finance challenges

Lakhani also mentions a current popular trend at the moment that people are using for their financial reset. “The no-spend month is a really good way to achieve a financial reset,” he says.

“This involves stopping spending on non-essentials like clothing, days out, takeaways as well as smaller frequent purchases like buying a coffee or making quick trips to the shop or buying snacks.

“A lot of us will go out at lunchtime and buy lunch and that can become quite expensive quite quickly. Making your own lunch could save you a lot of money actually.”

“There are other challenges you can take part in that can help you start your financial reset. One of the most popular ones at Plum is the 1p challenge. This is a year-long money-saving method where you can save one penny on the first day and add an extra penny each day for the next 365 days. So by the end of the year, you’ll have saved almost £668.

“Also consider roundups – these round up all your purchases to the nearest pound. The amount you save depends on how much you spend but most people find they don’t notice the money leaving their account when using a roundup tool, and the savings add up quite quickly.

“I think that’s the key thing with these challenges is they’re automated and you’re not having to think that you have to put this money aside, it is done automatically.”

Maximise all benefits available

“Lastly is making sure that you are maximising on the different benefits and tax breaks that you might be able to get from the government,” Lakhani says.

“For example, if you’re a married couple, there’s a married couples allowance so you may be eligible for that if you’ve got children. Also make sure that you are taking advantage of free childcare hours but also making sure that you know if your earnings are appropriate and then you can maybe access child benefits as well.

“Another important thing to check is your council tax bill and make sure you are on the right rate, that could save you significant amounts of money as well.”