How Your Annual Spending Review for 2024 Can Set You Up for Success

How did 2024 wrap up for you financially? Did your net worth increase? Did you hit your budget targets? Are you saving the amount you need to meet your goals and retire?

You may not be able to answer all of these questions, but now is a great time to set your financial resolutions and start your 2025 (and beyond) financial journey. Here’s how a review of your 2024 spending habits can set you up for better money management in 2025. 

Know Where Your Money Went in 2024

When you’re figuring out how to be better at managing money, step 1 is knowing what you’re spending it on. To start, review your annual spending and categorize your expenses. Some of the most common categories are:

• Housing: Mortgage or rent
• Food: Groceries and restaurants
• Necessities: Household and hygiene supplies
• Clothing: Clothing, shoes and outerwear
• Transportation: Car payments, maintenance and repairs or public transit costs
• Medical: Copays and deductibles for appointments and medication
• Utilities: Electricity, natural gas, internet and cell phone
• Insurance: Coverage for your home, car and health
• Recreation and entertainment: Travel, concerts, sporting events, streaming services and shopping
• Debt: Payments on credit cards and loans
• Child-specific expenses: Daycare, tuition, activities and room and board
• Savings: Retirement, investment and college savings accounts

You can put your expenses in whatever categories make sense for you — they don’t have to follow this list exactly. For example, you might want to include restaurant meals as “recreation and entertainment” or put health insurance under “medical.” You may want to separate or combine categories or create new categories. 

The important thing is that you know how much money you’re spending and where you’re spending it. 

Analyzing Your Spending

You might discover that all of your spending is in line with your budget and your goals. Great! You know how to manage your money. Keep doing what you’re doing.

On the other hand, your spending analysis may reveal that you aren’t spending money in ways that support your long-term goals, maybe without even noticing. Watch for signs of “lifestyle creep.” That’s when you gradually spend more, without even realizing it. 

For example, are you shopping for clothes you don’t really need, eating at expensive restaurants or finding reasons to buy yourself little treats? If you see that those costs are climbing, it might be time to rein in your spending while you work out a new budget.

You may even discover that you’re spending more than you earn. If that’s the case, you’ll need to look for ways to reduce your expenses.

Cost-Cutting Strategies for 2025

Everyone’s situation is different, but here are some cost-cutting strategies to consider when creating your budget for the new year:

• Recreation, entertainment and restaurants could be places where you can cut back. Maybe you can cook at home more often, invite friends over to watch sports or spend your vacations closer to home.
• Medical bills can be steep. Review your health insurance plan and your expenses and make sure you’re in the right one for your costs. (You can only change your health insurance plan during open enrollment or if you have a major life change like getting married or changing jobs.)
• If you haven’t shopped around for home, auto or other insurance coverage in a while, now might be a good time to compare rates. 
• Review what you spend on groceries. If finding the time to shop is a struggle, look into curbside pickup or home delivery. You might discover it saves you money.
• You may be able to get better rates on your utility bills. You can connect with the companies that provide your services and ask if they are offering any promotions. 
• Review your subscriptions and cancel any that you aren’t using, or that you don’t use enough to justify the cost.
• Sometimes, big changes can mean big savings. Are you open to moving to a smaller home or apartment or trading in your car for something more affordable? These types of changes can save you thousands of dollars a year.

Dependable Insurance Coverage at Fair Rates

When you’re insuring your health, car or home, your insurance costs can add up. Take this five-question SuperCheck quiz to find out if you have the coverage you need, no matter what company you’re with. A Farm Bureau insurance agent can make sure you have the coverage that’s right for you at a price you can afford.