Test.setup:

• @testSetup ( Set Up Test Data for an Entire Test Class )Use test setup methods (methods that are annotated with @testSetup) to create test records once and then access them in every test method in the test class.
• Test setup methods can reduce test execution times especially when you’re working with many records
• Test setup methods enable you to create common test data easily and efficiently.
• Test setup methods enable you to create common test data easily and efficiently.

@isTest
private class CommonTestSetup
{
 @testSetup
 static void setup()
 {
  Account acct = new Account();
       acct.Name = 'Salesforce.com';
       acct.Industry = 'Technology';
  insert acct;

  Contact cont = new Contact();
       cont.FirstName = 'Annappa';
       cont.LastName = 'ph';
       cont.AccountId = acct.Id;
  insert cont;
 }
 
 @isTest
 static void testMethod1()
 {
  Account acct = [SELECT Id FROM Account WHERE Name='Salesforce.com' LIMIT 1];
     acct.Phone = '555-1212';
  update acct;
 }

 @isTest
 static void testMethod2()
 {
  Account acct = [SELECT Phone FROM Account WHERE Name='Salesforce.com' LIMIT 1];
  System.assertEquals(null, acct.Phone);
 }
}

Note:

If a test class contains a test setup method, the test setup method executes first, before any test method in the class.
Multiple @testSetup methods are allowed in a test class, but the order in which they’re executed by the testing framework isn’t guaranteed
If the test class or a test method has access to organization data by using the @isTest(SeeAllData=true) annotation, test setup methods aren’t supported in this class.