Rethinking your budget ahead of 2025? Do a quarterly review!

Want to overhaul your personal budget in the final months of 2024 and get a jumpstart on 2025? It's about time for a quarterly review!

Break Your Budget Founder Michela Allocca joins Brad Smith on Wealth to talk about methods to track and adjust spending habits to meet savings goals.

"The first is to make sure that you are tracking and updating all of your numbers. This gives us a baseline snapshot of where you're standing with your finances at this point in time, especially as we are in Q4," Allocca says. "So the holidays are coming up. It's generally the spendiest season of the year."

This helps savers rethink how committed they are — overcommitted or undercommitted — to their financial benchmarks.

The Own Your Money and Own Your Career author lays out how to properly categorize essential and non-essential expenditures. As the holiday shopping season is right around the corner, Alloca itemizes who she will be buying gifts for while considering future travel plans to find early deals on flights and bookings.

To watch more expert insights and analysis on the latest market action, check out more Wealth here.

This post was written by Luke Carberry Mogan.

Video transcript

We're about two weeks into the final quarter of the year and while businesses are reporting their latest financial results, it's a good time for you to review your money as well.

Our next guest is gonna tell us how we can do a quarterly review of our own money.

I've got Mia Alaa, who is the founder of Break your budget.

Great to have you here with us.

I, I mean, I thought I was cute and put up a little, you know, Q three review Instagram Post, but that didn't dive into my finances.

How can people really set themselves up for their own quarterly budget review?

A quarterly financial review is absolutely essential.

I think we're thinking about finances on a yearly basis, but when we're thinking about them from a quarterly basis, instead we can realign.

So there are three key steps to a quarterly money review.

The first is to make sure that you are tracking and updating all of your numbers.

This gives us a baseline snapshot of where you're standing with your finances at this point in time, especially as we are in Q four.

So the holidays are coming up.

It's generally the spies season of the year.

I recommend that you use either some sort of budgeting spreadsheet or you can automate things with a budgeting app or a financial management tool.

There are so many out there that exist and most of them are really awesome.

The second thing that you're going to want to do is review your progress related, not only to any of your financial goals.

So that could be a goal in investing goal like contributing to your 401k or a debt payoff goal.

Let's say you're paying off a student loan and beyond just reviewing your financial goals progress, you'll also want to look at your spending for the last quarter or the year in full if you've tracked all of your expenses for the full year, and the final thing is thinking about any sort of pivots adjustments, things you want to build into your budget, things that you want to accomplish by the end of 2024.

How does your spending have to change?

Do you need to adjust the timeline of your goals?

Maybe we have over committed or maybe you under committed and you had a great year looking at things from this quarterly perspective allows you to make those smaller adjustments.

Ok.

So if you look at your budget and you say, well, we need to make some serious adjustments, then we are the first areas that people should start identifying and looking at across their line items.

Absolutely.

So we have essentials and non essentials.

If we're thinking about essentials, obviously, some of those living expenses can't be changed.

But there are smaller areas of essential expenses like potentially your grocery budget or negotiating down your car insurance or your home insurance calling and having new quotes or getting new quotes every six months can actually make a big difference in those baseline living expenses when we're thinking about non essentials again, especially as we're getting into the holiday season, taking a step back with eating out shopping, any type of entertainment for a month or two weeks or even six weeks can make a huge difference in helping you build up a savings fund for the holidays or really amplify reaching your financial goals.

Ok?

You mentioned the holidays.

You're excited.

We're excited.

So what budgeting tips do you have ahead of this big cyclical spending season?

Yeah.

Yeah, it's definitely a really expensive time of year and you know, we're supposed to enjoy it, right.

It shouldn't be a time where you have to be super ruthless about your spending.

However, if you're not prepared, it can be super, super overwhelming.

So a couple of things I recommend you do, especially now since we're in October.

So things haven't really started yet.

You still have about five weeks until Black Friday.

So there's plenty of time to get things in order.

I like to map out who I'm planning to buy gifts for and ideally an estimate of how much I'm gonna spend on each person or what I am planning to buy them.

If I already have that idea.

I also obviously like to think about travel.

So flights, hotels, road trips, all of those obviously cost money specifically if you are flying or staying somewhere.

So make sure you're identifying when you're leaving what you need to book and get those on the calendar because the closer we get to the actual holiday season, the more and more expensive those get and on things, book or things book up.

So you might not be able to get the flights or hotels that you want.

And the last thing and this is what really gets people is thinking about holiday events, holiday parties.

These are ancillary costs that always, always, always get overlooked, hosting a holiday party, attending a holiday party.

If you don't want to show up empty handed work functions, sometimes those are black tie, you need proper clothes to attend those and that can cost money.

So thinking about events you're going to attend and events you may be hosting, make sure you're building those into your broader holiday budget.

Once you've mapped all of this out, you can add things up, that'll give you a rough estimate of what you're planning to spend this holiday season and then you can start making short savings transfers over the next couple of weeks.

I recommend you open up either a separate savings account or a separate high yield savings account specifically for the holidays.

So, within my high yield savings account that I use for all of my different savings goals, I actually have different buckets and I have one specifically for the holidays.

So over the next couple of weeks I'll be transferring in 100 to $200 a week to cover all the stuff that I'm gonna be doing during November and December.

All right, you've given me some ideas.

I've taken notes now.

It's time to activate it.

Michaela Loo.

Who is the break your budget founder?

Thanks so much for the time.

Michaela.

Thank you.