8 money changes you can make now to create better spending habits in 2025

The start of a new year is the perfect opportunity to take control of your finances and build better money habits - but it can be hard to know where to start.

“Financial success isn’t about being perfect - it’s about progress,” says Nick Charalambous, Financial Advisor at Alpha Wealth . “ Small, consistent efforts can create a strong foundation for long-term stability. Whether your goals are to save for a home, reduce debt, or feel more in control of your money, 2025 is your chance to start fresh.

"By reviewing your finances, setting realistic goals, and using tools like tax credits and savings plans, you’ll be well on your way to making 2025 your most financially secure year yet.”

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Here Nick shares eight actionable steps to help you get started:

1. Review Your Finances Regularly
Think of your financial plan as a guide to staying in control of your money. Track all your income and expenses for one month—groceries, transport, bills, and even forgotten subscriptions. Once you know where your money is going, you’ll see opportunities to cut back, like eating out less or cancelling unused services. There’s a handy free Budget Calculator at Alpha to help you get a clear picture of your financial situation.

2. Reduce Debt Strategically
Overspending during Christmas is common, especially on credit cards with high-interest rates. Prioritise paying off this debt as quickly as possible before you start saving. Reducing debt gives you more financial freedom and lowers the stress of repayment in 2025.

3. Segregate Your Savings
Divide your savings into three pots:

• Short-term (less than 3 years): For immediate goals like buying a car or holiday expenses.
• Medium-term (3-10 years): For goals like education or major life milestones.
• Long-term (retirement): Invest in tax-efficient options like pensions to maximise growth.
  By separating your funds, you can use the right financial tools for each timeline, ensuring your money works harder for you.

4. Maximise Your Savings Returns
Don’t let your money sit in low-interest accounts. For short-term savings, consider online banks like Raisin or Bunq, which often offer rates above 2%. Lock in fixed-term deposit rates now before they drop further in 2025. Also, review your mortgage rate—you might be able to switch to a lower rate and save significantly.

5. Boost Pension Contributions
It’s never too early or late to focus on your pension. Small contributions now can grow significantly over time thanks to compound interest. Take advantage of tax relief - up to 40% - on contributions. If your employer offers a matching scheme, join it to benefit from essentially free money.

6. Practice the Rule of 72
Impulse purchases can derail your budget. Use the “Rule of 72”: wait 72 hours before making any non-essential purchase. This cooling-off period is particularly useful during January sales, helping you avoid unnecessary expenses while still enjoying genuine bargains.

7. Claim Your Tax Credits
The start of the year is the perfect time to review your tax credits and allowances. You can reclaim up to four years’ worth of missed credits, such as remote working relief or the rent tax credit (€1,500 per individual). Update your details on Revenue Online Service (ROS) or myAccount to ensure you’re not leaving money on the table.

8. Plan Ahead for Big Expenses
Instead of scrambling for cash, start saving for large expenses early. Open a dedicated savings account in January for your 2025 goals - whether it’s a holiday, Christmas, or a major purchase. For instance, saving €167 per month will leave you with €2,000 by summer.