New Year, New Budget

A new year is here! To me, the new year always seems to come with a set of new possibilities. The year of 2025 has so much potential. Yes, there will be things that come up that one person cannot control. Unexpected expenses, changes (or lack there of) in the economy and in our own personal economic situations that we cannot anticipate. But! I am at heart a planner, and the beginning of a fresh new year is a great time to be, or even to become, a planner yourself. Now is an excellent time to lay out the year ahead as best you can and plan for your financial future. 

Look into Your Crystal Ball

What expenses and windfalls might you be able to see coming in 2025? Are you planning on traveling this year? Do you anticipate getting money back at tax time that you might be able to put away for an upcoming expense? Planning now could save you a lot of stress in the long run. And budgeting for a planned activity or even (though I know none of us want to think about it so soon) the holidays coming around again now could save you a whole lot of stress in the future. 

When I consult my financial tea leaves for 2025, though I know I won’t get perfect clarity, I think I can see the general shape of things. I can estimate how much I will get back in taxes, at least approximately, based on past years. I know that it will soon be time to book reservations like camp sites for this summer and to buy concert tickets for my dad’s birthday. I also know that this may well be the year that my elderly water heater decides to shed this mortal coil, a day I am not looking forward to. Planning ahead makes me feel better about the year ahead. I encourage you to do the same as best as you can, in the interest of keeping financially fit. Even if it is not something that you have done in past years, now is a great time to start!

Plan for Expenses–Big and Small

Start with those things you know will come up every year. Maybe for you it’s a yearly vacation, or back to school shopping in August. Write down any major expenses that you expect to come up this year. Then, work backward from there. How much can you save monthly, or even weekly, to get you the amount you have budgeted for that upcoming expense? When will you need to start saving and how much will you need to save to make sure you meet your goals? I always find it helpful to also think about those smaller things that always seem to sneak up on me. Oil changes, anticipated medical costs, and other small things add up to and can potentially hinder your budgeting if you don’t account for them as well. 

Make a Plan for Extra Income

I know, it always seems that the unexpected expenses are much more plentiful than the unexpected gains, but you never know! Without a plan in place it could be easy to splurge with unexpected income. I find it helpful to have a plan in place just in case I find myself with more in my budget than I had anticipated. Knowing how you would put that money to good use could make a big difference in the long run. Some ideas for extra income game plans could be adding to your savings, just generally or with a goal in mind. You could also use it to pay down a debt and put yourself in a better financial position going forward. You could even invest that money back in yourself. Is there a class you have wanted to take? A project that would improve your life that you have never had the capital for? Don’t discount plans like that either. Personally, anything extra that I find between my couch cushions this year will be going in my puppy fund!

Expect the Unexpected

Yeah, yeah, I know it’s clichéd, but something that you don’t see coming could be right around the corner. Car repairs are the worst, and something that I know comes up unexpectedly for our members with extreme regularity. Medical bills can also be a big blow to our finances that we don’t see coming. Though it may seem futile, having something to put toward unexpected expenses could make a big difference down the road. I recommend looking at your budget and seeing what you might be able to put away each pay check toward an emergency fund. Even if it’s just a bit at first, everything helps in the case of an emergency. 

Now Stick to It

After the planning (the fun part if you ask me) comes the hard part–sticking to the budget you’ve laid out. Make it easy on yourself whenever possible. There are many free apps which you can use to track spending and savings, or keep a notebook if you prefer pen and paper. You can also automate the savings process for yourself. Open a sub savings account, or more than one, at your credit union (SAFCU!) and set up automated transfers from your account or directly from your paycheck when it’s direct deposited. If you never see that money before it’s in your savings, it makes it harder to miss it. It can also be helpful to find ways to keep yourself accountable. Do you have a friend or family member who you feel comfortable sharing your financial goals with, and who would be willing to do the same with you? Gamify it by making it a competition with them, or simply share your experiences so that you can stay accountable and so that you can celebrate your progress! Finally, try to accept that we all make mistakes and slip up from time to time. Do not let the lofty expectation of sticking to your budget perfectly knock you off track if you do have a slip up. Know that these things happen to all of us, and resolve to move forward. 

Make the Most of the New Year

Budgeting doesn’t have to be overwhelming. By taking small, intentional steps, you can set yourself up for success. And remember, you’re not alone—your credit union is here to support you with tools and resources to make your financial goals a reality. We have numerous financial counselors on staff who can help with setting up a budget, or help to course correct if the budget gets thrown off. 

Let’s tackle 2025 together, one smart money decision at a time. You’ve got this!