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By this stage in January, the early enthusiasm for a healthy and wealthy 2025 tends to wear a bit thin. You’re only human, so nobody would blame you for being tempted to go back to your expensive indulgences.
However, if you can find the determination to stick with it, you could save over £1,000 this year, so it might help to stop thinking about what you’re giving up — and focus a bit more on what you stand to gain.
The Hargreaves Lansdown Savings and Resilience Barometer shows that on average each household spends £574 a year on alcohol and tobacco. It means sticking to any New Year's resolutions to give up drinking and smoking could save you £47.83 a month.
Meanwhile, if you’ve pledged to spend less on going out, the savings can be equally impressive. Households spend an average of £2,532 a year on hotels and restaurants, and £2,782 on recreation and culture. Cutting just 10% of this spending could save £531 in a year — or £44.28 a month.
Read more: Five ways to beat a debt hangover from Christmas
It means that cutting your alcohol and tobacco spending and reducing how much you spend on going out could save you an average £92.11 a month — that's over £1,000 over 2025.
You can make a really positive difference with this cash. If you’re carrying expensive debts, putting this money into paying them down can save you from paying more in interest. If, for example, you had £2,000 on a credit card at 20% and are currently paying £50 a month, it would take five years and two months to clear the debt, and you’d end up paying £1,118.86 in interest. If you added £92.11 to your repayments, you’d cut the repayment time to one year and four months, and you’d pay £269.66 in interest — saving £849.20.
If you need to beef up your emergency savings, meanwhile, you could put it into a savings account paying 4.5% and after a year you’d be sitting on £1,128 — which is an impressive step towards building enough cash to cover the recommend minimum of three to six months’ worth of essential spending.
If you wanted to make a start on investment, and you made this resolution a long-term lifestyle change, this would be a brilliant way in. If you were to drip feed your monthly saving into investments over 10 years, with an average return of 5%, you might end up with a nest egg of £14,303 in a decade’s time.
And most impressively of all, if you were to pay this into a pension, and your employer matched your contributions between the age of 35 and 68, you could add a grant total of £102,000 to your pension pot, making a really significant difference to life in retirement.