Chase financial institution shares 5 golden guidelines to grasp your cash as 2025 approaches

Christmas is the time of year when our banks take a battering and with the cost of living crisis factored into the mix, Chase has come up with five ways to keep spending in check

Everybody feels the pinch at Christmas – no matter what their financial circumstances are.

Countless thousands of pounds is spent on gifts, food and celebrating even as the cost of living continues to soar. Now online bank, Chase has come up with five golden rules to encourage savvy spending ahead of 2025.

It could help people stay out of the red after the festivities are over. Tips on the Chase website include:

Rule 1 – Only spend what you have

It’s a simple rule, but it’s still the most potent piece of money wisdom: don’t spend more than you earn.

Living within your means is a sure-fire way to stay out of debt, avoid creeping interest costs and create financial stability. Plus, the peace of mind that comes from knowing you can afford your lifestyle is priceless, Chase say.

Rule 2 – Create an emergency fund

As the famous line goes ‘Life is like a box of chocolates, you never know what you’re gonna get’. That means a crucial money move will always be to have a stash of cash for when emergencies strike. It’s a good idea to aim for 3–6 months of living costs, saved in an easy access, high-interest saving account. And remember to top up your emergency fund if your cost of living has increased and if you can afford to.

Rule 3 – Pay down debt as a priority

Usually, the interest you pay on debt is higher than the interest you gain from savings. So, you might be better off repaying expensive debt as a priority before sending money to savings (aside from your emergency fund).

Here’s an example:

• The average interest rate on a UK credit card is 26.11%. If you had £1,000 of debt at a rate of 26.11%, you’d pay £261 in interest over the year (assuming this was simple interest and you made no repayments)
• The average interest rate on a UK easy access savings account is 2.77%. If you saved £1,000 in a savings account at a rate of 2.77%, you’d earn £27 in interest over the year (assuming this was simple interest and you made no withdrawals)

Rule 4 – Create money goals

For many of us, we’ll eat as much food as we have on the plate. Similarly, we’ll often spend the money that we have in our accounts. To really be in control of your cash, it’s a good idea to set clear money goals before it even arrives in your account.

That might mean determining how much you can afford to save, then setting up a standing order for the day you get paid. Or maybe setting a spend budget, with about 50% of cash going to ‘needs’, 30% to ‘wants’ and 20% to ‘savings and investments’.

Rule 5 – Make your money work for you

Idle cash can be costly – in other words, money that’s not earning interest is actually losing value due to inflation. So, to make your money work for you, consider putting it in high-interest savings accounts or, if you are comfortable with the risk of losing money, potentially investment products.

Over time, you’ll earn interest that compounds, allowing you to gain more interest on previous interest earned. With investments, any earnings over time can be reinvested to generate more dividends or returns, depending on the type of investment.

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