The New Year often feels like a fresh start, and if one of your goals for 2025 is to take control of your finances, now is the ideal time to reassess your budget.
In this episode, I explain why I make it a point to revisit my budget at the end of each year. I share the key questions I ask myself to ensure my spending aligns with my priorities. Whether you’re looking to be more prepared for holiday shopping, save for travel, or simply reassess where your money is going, I invite you to join me in doing a budget reset. This exercise will help you avoid last-minute financial stress, regain control of your money, and ensure you’re spending on the things that truly matter to you.
Follow along as I guide you through my simple framework for redoing your budget. Listen for these key tips…
- [00:55] Why I scrap my budget at the end of the year
- [04:55] Questions to ask yourself when redoing your budget
- [25:00] Reflecting on your budget: why this exercise is important
Tune into this episode of Money Files to learn how to redo your budget and set yourself up for financial success in the New Year.
Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.
If you loved my end of year budget reset, check out my episode, How I Align My Budget, Spending, And Future Goals As A Financial Coach!
Transcript for “Budget Reset for 2025: Aligning Your Money with Your Priorities”
Intro: Hi and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work everyday with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello and welcome back to another episode of Money Files. It never fails that the end of the year goes by extremely quickly. I can’t believe we are at the end of 2024, when you’re listening to this. If you’re listening on the day it’s released, it is going to be New Year’s Eve. So happy New Year’s Eve. If you’re listening, you’re listening to it after New Year’s Eve, I’m going to tell you Happy New Year, which I think you’re allowed to say like all of January. But I wanted to record this podcast episode for you because I actually, I redid my budget. I actually did it from scratch and I went through the same process that I walk clients through. And every once in a while I’ll like, I kind of scrap my old budget and one of the reasons I scrap it is because it gives me like a fresh lens to actually look at my money.
When I say that, just to be transparent with you is like there are little expenses that creep up into my life as well where I’m like, oh, I signed up for Netflix or I bought this, I bought that. And everything doesn’t always immediately go into my budget. I think that some of you may think that like everything happens immediately, but because I am good at looking at my numbers and good at thinking about my numbers, a one-off expense here and there added into my budget or something that may seemingly catch me off guard, it doesn’t impact me as much because I’ve built the budgeting habit. I’ve built the muscle where I’m looking at my numbers and my bank account has some padding and it has some flexibility in it. But periodically, like I said, I like to dump my budget and actually just start from scratch really to think about like, okay, what are my savings goals?
How am I spending my money day to day in terms of what money is going out for bills, the things that are fixed? And then like what do I have left over to spend? And I think it’s always a good place, especially if you’re one of my clients and you’ve been a client especially for years, that it’s just a good place to go back to because there are habits sometimes that we adopt because we’re human and we just may not have thought about like, Hey, what did we adopt? One of the reasons I like looking at my budget at the end of the year going into the new year is because I feel like it provides you this fresh start. It provides you a fresh take on things, especially when we think about savings goals. I think that one of the challenges that sometimes you may think about is like, oh, I can’t save for Christmas because it’s December and we’re already in Christmas, whereas if we’re coming to the end of the year, we’re coming in the beginning of the year, we can really think about how much money we want to save for Christmas or the holidays because you have all 12 months to be able to do that instead of having to do it in like a three month cycle or a six month cycle.
I think the same is true for travel or just thinking about where do I want to be a year from now? So hopefully you have a slower week this week and so you’ll have some time if you have a budget to be able to look at your budget. If you don’t have a budget, this is a great opportunity for you to actually walk through the process of creating a budget so you can feel in control of your money. And if you’re like, Keina, I don’t really know where to go and start, look in the show notes, download my spending plan and let’s actually look for, I want you to basically audit how you spend. I want you to look at it through the lens of fake math. If you’ve been following me for a while, I want to help you get rid of fake math and that’s like, all of those guesstimations and calculations that you kind of do, but you’re missing things and there’s little holes in your budget in the way that you’re spending and you’re thinking about money, that your money actually it drains and it leaves your account because of the fact that you don’t actually have real numbers that you’re using.
And so this is a great time to do a fake math audit and just look at your budget and look at your spending objectively and without any type of shame involved here. And also, let me just go in and dive into this. So one of the questions that I asked myself as I was going through creating a new budget was like, what did my year look like? What was I spending money on that maybe I didn’t totally account for? And how do I want to make sure that I account for some of those things as I’m going into 2025? So another way you might ask yourself this, is like what do I see happening in 2025 that maybe wasn’t happening this year? Like what habits do I want to lean into? One of the things that I actually get pretty regularly is I get massages and this past year for a part of the year I had a subscription to a massage place in my area, but I canceled the subscription because I had a whole bunch of hours built up.
But I can see in 2025 I’ll still want to get massages, but I have some old hours that I’m going to use and then I will probably either re-enroll in the massage subscription or I might just end up going, every other month, whatever that may look like. But that’s something that I made sure that I put into the new version of my budget. I think I talked about this last year, which I guess I need to probably evaluate if this is really a goal of mine or not. But something else that I was putting back into my budget was having someone come in to like deep clean my house quarterly. I will share with you that I generally feel like I could just do a better job myself. So it’s one of those things that I can’t wholeheartedly commit to, but I know that in terms of my time, especially with working for myself, it would be easier and more advantageous time-wise to have someone come in.
I really struggle with that because there are little things that I feel like people don’t do right but anyways, that’s a personality quirk there. So those were some of the things that when I’m thinking about what my year looked like in 2024 and what I wanted it to look like in 2025, I was looking like okay, I might want to do some house cleaning, I might want to do massages periodically. I made sure something that I actually, you guys are probably going to laugh because all of the women that I work with, I always look at their nails and I know who gets their nails done. But I made sure that I put manicures and pedicures into my budget. Once again, I prefer to spend my money on experiences versus like the monthly upkeep expenses, like a manicure and pedicure because for me I’m like I don’t want to give you my manicure pedicure money that’s a hundred dollars and I’d probably rather go get a massage than to get a manicure and a pedicure every single month. I can paint my nails on my own, but that’s personal preference and not something that you have to do.
I did go in and just said like, hey, if this is something that I definitely do more so in the spring and the summer, let me see exactly what that would look like if I got two manicures or pedicures a month. So that’s one way that I refined my budget. Something that I always forget every single year is my annual national park pass, it’s $80, it’s not super expensive but at the fact that I am making sure that is actually in my budget as well as an annual expense. So just going through and asking yourself these questions. I mean granted I’m budgeting week to week so I probably know my expenses a little bit better than you may know them, especially if you’re getting started.
But if you go back and even just ask yourself what do I do in the winter? What do I do in the summer? What do I do in the spring? What do I do in the fall? It can be a great way to start capturing some of the things that you are going to want to put into your budget because your budget and my budget are not going to look the same because we’re two different people. And so it’s going to give you an opportunity to think about what did my year look like this year? But then also what do I want 2025 to look like? Another question you can ask yourself is, when did I feel like I didn’t have money? What things did I feel like I didn’t have money for? The reason this is a great question as you think about auditing your budget and resetting it for 2025 is because we can get those things that catch you off guard and start to put them into your budget and start to incorporate them.
One of the things that really comes to mind here is auto maintenance. Auto maintenance I think is something that catches everyone off guard. Especially when it’s outside of an oil change. Auto maintenance is one of the places where I think about like okay, what’s my auto deductible? If you live in Virginia, I know this specifically like thinking about your property taxes for your car. If you are someone who gets some parking tickets, you may even want to put it into flush your auto maintenance a little bit more. But that might be a place that you felt like drained your budget. And so as we go into 2025, that would be something that I would audit in terms of increasing the amount that I’m setting aside for auto maintenance.
Along the same lines, another thing that comes to mind there is medical expenses. A lot of times if we’re thinking from one year to the next, as we go from 2024 to 2025, you’ve probably already made your elections, your healthcare elections. But think about how much money are you going to potentially see yourself spending out of pocket for your healthcare elections. If you know that you are going to need to meet your deductible early in 2025 or if you know that you are going to go to therapy and you weren’t going to therapy in 2024 but you’re going to do it in 2025 or maybe you have some dental work or you know that you have some doctor’s appointments in the beginning, the first quarter, the second quarter of the year and you are going to need to spend extra money in that way. You would want to make sure that as you prepare for 2025 that you’re thinking about what am I setting aside for medical?
That might not be something that you did this year, but how can you make sure that in 2025 it’s something that you’ve taken care of? So I’m really big on looking for financial patterns and so if you know something is coming up or you tend to see that something always happens, then that is a pattern in your finances. It can be a pattern that you look for in your bank account. And so when we understand this pattern, we want to make sure that we put it into our budget so we understand how that breaks down and it impacts our cash flow. And that is going to help you disrupt like the fake math that continues to happen month in and month out with how you’re spending your money. One of the things I would caution you, especially as we’re talking about something like auto maintenance or medical, is you can have a tendency to say like, oh but I don’t need to pay for it this month, which is true, you don’t need to pay for it this month.
But the thing that you want to do is if you know that when you add up all of your medical expenses you’re going to need a thousand dollars out of pocket. You don’t want to have to just find a thousand dollars randomly in the month of June, it’s going to be a lot easier if you can save $83 or $84 every single month because that’s a thousand dollars divided by 12. If you’re putting aside a little bit each month, you’re going to be stacking like a little slush fund for yourself so that when your auto maintenance or your medical like copays come in, that you already have that money set aside. And so that’s the thing that’s going to help you really feel in control of your money and not feel like, dang there’s another thing happening because you’re already going to have money set aside for that expense.
One of the things my clients always say to me is like Keina, it felt so good to be able to pay my annual bills and not have to worry where that money was coming from. So the things that may make you feel like you didn’t have money for, I would say auto maintenance, medical. Also, if you own a home, home repairs, that’s one that I think always I’m reevaluating for myself because depending on the age of your home, even the age of your car, if you go back to auto maintenance, like you may need to save more money, especially if you already know this year. Think about the plumbers that came in your house, was there a roofer that came to your house? What conversations were you having with these people? And if you know that that’s going to be an expense, let’s plan for that right now.
Even if, listen to this, even if you’re like Keina, well I am going to take advantage. I’m getting a new roof and I’m going to take advantage of a 0% interest for five years, that’s fine, but let’s start putting that as an expense in your budget right now. So if you know that payment is $300 a month for your roof, let’s put that into your budget right now as we’re doing this fake math audit because you are just going to feel better about how and where that money is coming from and it’s going to give you a better big picture so you’re not having to figure it out when it happens. When we’re using real math, it keeps you from having to just figure it out, like you’re exhausted right now with your finances because you’re having to figure everything out. And figuring it out means that you’re having to make decisions all the time about your money and that’s why money doesn’t feel easy for you.
We want money to feel easy for you and the way that we make it easy is to ask ourselves these questions that cause us to reflect on our spending that then help us plan ahead for the future and so that’s the goal. I’m actually going to pause real quick right there because I’m actually thinking about one of my clients right now. She’s actually really good at planning ahead and thinking about what expenses may be coming up. We’ve been working together for the past three or four months and she’s like, oh Keina, like I know this is going to come up and this is going to come up. And I will tell her the thing that I’ve told her as expenses are starting to come up is to also figure out what her non-negotiables are for her savings because I don’t want, my caution here as the coach is to make sure that her bills aren’t overtaking her ability to save or her ability to meet other financial goals that she set.
So as we recognize new expenses, those are great, we want to make sure that we’re putting them in, but also as we’re recognizing new expenses, we want to make sure that we’re still in control of how money is leaving our account. So sometimes that may also be questioning like, yes, this is an expense, but is it something that I need or is it just something that I’m always paying for and I haven’t decided to cancel it? So that’s just a little asterisk that I wanted to put there as you get better at auditing your budget and thinking about how do I want to set my budget up to support me in the next 90 days, in the next six months and the next year. So another thing that I want you to think about as you audit your budget and we’re getting rid of the fake math for 2025, is one of the things I love when I am thinking about planning out my finances, is I like to think about my annual money goals. So if one of my goals is to make sure that I have $6,000, to be able to just spend on travel this year, then I know if I break that down I need to be saving $500 a month. So one of my other annual goals is to increase my Roth IRA contributions. And so if I am thinking about that as I’m auditing my budget for 2025, I want to make sure, I personally love to make sure that my savings goals, that I actually address those first when I’m auditing my budget because sometimes we can have a tendency to dip into our savings or to not be thinking big picture about our savings.
So if I start there, my savings goals become like my non-negotiables, especially when it’s something like retirement based or emergency fund based or in the sense of like home repairs, auto maintenance, like things that I know are going to happen. And so we want to start with those annual money goals because it’s going to help us frame, okay, like where do I want to be spending my focus in recrafting and shifting my budget as I go into 2025? So I would encourage you to really, especially with pen and paper, like what are your money goals? What did you do this year in terms of saving money? What do you want to do next year? One of the exercises that I love to think about is like, what do I want to be true in a year from now? And so if you’re thinking about that, like what’s true for your savings in a year from now? So that can help you look at how you want to shift your expenses for 2025.
The other thing that I was also looking at in resetting my budget for this year is where my expenses naturally fluctuate, like things that are not in my control. And so these are things that I want to make sure that I shift in my budget as we go into 2025. And one of those things that I want to shift is my HOA fee. So my HOA fees, they’re looking at like a special assessment in our neighborhood that’s going to be added to our HOA fee. And so I know in January my HOA fee is going up, I think it’s going up like $8. I actually called the company and they couldn’t tell me because something’s still happening with our board, but I went ahead and shifted it based off the paperwork that I have in hand.
So I shifted my HOA fees, my auto insurance is one of those things that fluctuates. So I made sure that my auto insurance is set, I pay in six month premium, so I made sure that’s set. Also depending on your mortgage lender, but something else that can shift is your mortgage payment and your mortgage payment shifts because your property taxes can shift and your homeowner’s insurance can shift. And so my mortgage payment went up, it was about, I think it went up maybe like $75 I’d pay biweekly, so it went up like $75 biweekly payments. So that’s something that I needed to shift in my budget. And then I always make sure that I’m checking how much I set aside for utilities and then how much I’m setting aside for groceries. So the reason that these are important for me to adjust and shift as we go into 2025 is because if they go overlooked, then I am going to be spending an extra, easily an extra $300 a month that I haven’t accounted for and that I’m not actually using the real number in my budget.
This is how the fake math creeps in and I end up living paycheck to paycheck if you’re not paying attention. So I’ve gone in and I’ve shifted my homeowners, my auto insurance, my mortgage, my groceries, and my utilities. So those are things and areas that I would tell you to pay attention to as well so that you don’t end up getting caught off guard by that. And like thinking also, what expenses went up this year? Were there annual expenses that went up this year? Maybe your landscaping guy, he told you next year it’s going to be more for us to cut your yard, it’s going to be more for us to do your cleanup from the spring to the summer. So think about those numbers and where will you have some natural fluctuations in your budget. And then also I think this is, I’m like, do it on your birthday or do it at the end of the year.
Also look in your budget, where are there bills that you can reduce? The ones that I always come back to are checking your cell phone bill. Mine sometimes can like creep up, not explained, nobody knows, but you want to always check that in addition to checking your internet or your cable bills, those are other things that fluctuate. I also check my auto insurance. I also check my home insurance to make sure that I’m getting the best rates because those are other things that can fluctuate. And so if you are checking on those bills, like the cell phone, internet, home insurance, auto insurance, something that’s negotiable, the benefits of that is that if you’re saving $10, $20, $30 in any one particular area, it’s also going to help offset some of those increases that I talked about. So once again, I’m thinking big picture here, looking at my numbers for the start of the year. So I want to be asking myself like, are there any bills that I need to check on that I could potentially reduce?
And then lastly, I want you to think about for 2025, like where do you want to leave space in your budget? What things are happening? A lot of my friends are going to have 40th birthdays this year, so I know that’s a space that I want to leave in my budget to be able to travel or give them gifts or whatever that looks like. Maybe your friends are turning 30, maybe they’re turning 35 or they’re turning 40 or 45, 50, whatever that may look like, 60. And so think about where do you want to leave space in your budget? Did you promise yourself that you wanted to take on a new hobby or do you want to take more weekend trips? If that’s true, it’s asking yourself where you want to leave more space. It’s like how is that space showing up in your budget and do you need to put in something that, call it a joy fund, call it a 40th birthday fund, whatever that looks like but like where are you leaving space for those things?
And mind you, you’re asking yourself all these questions because it’s also going to help you drill down on the investments that you want to be making in your life and the investments that maybe you have been making in your life, but they’re actually not important and it’s not where you want your money to actually be going. You heard me talk through earlier in this episode, like, I mean I could probably take someone cleaning my house, I could take it or leave it if I had to think about spending $300 a month on getting my house cleaned. And right now, I don’t see a real ROI for myself in terms of the time. So I would rather probably put that $300 towards travel instead of getting my house cleaned. So those are trade-offs, but if I decided that I wanted to get my house cleaned and I’m going to find $300 somewhere in my budget, then something else is going to have to shift.
So I talk myself through what those ROIs are going to be for myself because I want to make sure that I’m also honoring what I said my financial goals and priorities are. But this is a great time at the end of the year to really audit your budget for fake math and be able to take that 30,000, 80,000 foot view of where you want to be. If you decide to save, $600 a month towards your emergency fund, what would be true for you by the end of the year?
Okay, I would have saved $7,200. That would make me feel really good. I want that to be a non-negotiable. What else needs to be true for my numbers? So this is, like I said, just a great point to be able to reset. And if you already have a budget, I would encourage you once again, download my spending plan. Just do it in a different way to make sure that your numbers make sense. What actually is really funny, when I did my budget initially, and mind you, I budget all the time, it was like, oh, this is really interesting. I’m actually spending, I think my budget was over by like $300 and the reason that my budget was over by about $300 is I had set up some additional savings targets. And so I have separate bank accounts and so one of my bank accounts, like I don’t really actually factor it into my spending plan, if you will.
So I had set up like an extra, maybe like $150 in transfers, but when I actually captured it in this new budget that I built, it was impacting, like how I’m spending money month to month. And so nothing bad has happened to me this year by like not factoring it in, but it was just really interesting, like I said, to be able to put all of the numbers in one place and be able to objectively look at, okay, how much am I putting towards savings each month? How much am I actually paying towards my bills? How much do I have left over to spend? What’s that mean for my annual goals? What else am I missing? What else do I want to think about? And just helps me do an overall audit and reflection on my personal spending. The reason that this is also good to be able to go through and think about this is it can help you set goals for what the plan is after you get your bonus.
What is the plan for you after you pay off debt, especially if you are in a space this year where you’re like, Hey, this is my year, I’m going to pay off my debt by April. And like starting to set up like what’s the plan for that afterwards? Or maybe you’re getting a raise, this is going to also help you think through what am I going to do with that raise? What’s the impact of that raise? You want to make sure that you have that knowledge before the thing actually happens. Because what I find as a coach is that we think that the raise is really going to change our life drastically or that the debt being paid off is going to drastically change our life, or the bonus is going to drastically change our life. And let me just tell you, you’ve already had the debt paid off, you’ve already had the bonus and you’ve already had the raise and your life hasn’t changed drastically.
The reason your life hasn’t changed drastically is because you don’t have a plan and you haven’t factored in, what does that $10,000 bonus actually mean for you? What does the $30,000 raise actually mean for you? Because you have that fake math that is showing up with your budget and how you think about and spend money. So once again, I’m offering this to you at the end of the year as we go into 2025 to really think about what your numbers mean and what you desire to be true. So thank you for tuning in. Also, listen, there’s no special glory or sauce in the new year, but I do know that for so many of us, the new year can feel like a fresh start, new intentions. You feel like you’re not in the hustle bustle of the holidays.
And if you have been someone who’s like Keina, I listen to your podcast or maybe it’s your first time listening to my podcast and you know that you want that accountability and support that I can provide you in my five month coaching partnership, I invite you to apply like now. If you need to pause the episode, go to my website and book a call and apply now because we can work on setting up your 2025 budget, like the thing that I always love is to be able to tell the stories of my clients who started working with me like in the end of the year and how a year from now their entire life has changed, and how they think about money and how much control they now have. As 2023 ended and we came into 2024, so many clients said yes to this and so even thinking about where they are as we finish out this year is phenomenal.
There’s a lot of clients in there that are the year end bonus people where they were getting those $20, $30, $40, $50,000 bonuses and they used some of that money to be able to work with me. Some of them put it on a credit card to work with me. But ultimately what happened is they were able to change their life forever and really shift into a space where they feel in control of their finances. And so the exciting part is they’re still getting a bonus this year, but now their bonus is actually going to fund bigger goals like the trip to Disney, the anniversary vacation with their spouse and their partner or doing upgrades on their house. And so I love being a part of that journey. So don’t wait, just go ahead and apply and I look forward to seeing you on a call, which will be virtual over Zoom. And until then, I will talk to you next week. Have a great week.
Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.
