Five tips to cover expenses in 2025
Managing day-to-day expenses is key to long-term financial success, no matter what your financial goals are.
Spending within your means doesn’t just help you set aside more for those goals, though. It also helps you feel less stressed and more confident about your financial situation. This article explores five tips to help you cover expenses in 2025 so you can create a more secure future.
1) Make a budget
Covering expenses starts with knowing them, and that’s what a budget helps with. Start by listing your regular income sources. Next, list your expenses by category — such as groceries, gas, and housing.
Track your spending over a month to estimate each category’s spending amount and use this to set new spending and savings numbers. You may have to adjust your current spending in certain categories if overall spending exceeds your income.
Once you have done this, follow your budget to ensure you spend less than you earn. It’s fine if you don’t meet each category’s number exactly because budgets can change and evolve. What matters most is that your money inflows and outflows become more predictable and that you spend less than you make.
2) Save an emergency fund
Emergency funds help cover unexpected expenses, like job losses, car accidents, health scares, or storm damage. These funds help offset the costs themselves and replace income to cover living expenses if you lose income during the emergency.
Save three to six months of living expenses, aiming for the upper end or higher if you have dependents. Consider using a savings app that does the saving for you, or a high-yield savings account so your savings earn more interest and lose less value to inflation.
3) Sell unused items
Spring is a great time to clean out your home, get rid of unused items, and earn some money. Hosting a garage sale is one option. However, you can also sell items online through various websites. For example, sites like Facebook Marketplace and eBay make selling nearly any reasonable item easy. They also give you more control. The drawback is you must do extra work to create a persuasive listing and, for platforms like Facebook Marketplace, vet the buyer.
Other sites are product-specific, such as for smartphones. These offer less control and lower sale prices, but the upside is convenience. You typically just have to mail in your items for evaluation and then select your payment method. Some in-person stores may also let you trade in items for cash. Regardless, selling unused items can help you reduce stress, save some extra cash for your emergency fund, or cover higher-expense months.
4) Use debt wisely
Certain debt products used wisely can help you effectively reduce expenses or stretch your budget for crucial purchases. For instance, credit cards let you cover your purchases now and pay them later when the statement period closes.
These also often pay out reward points for purchases in various categories, such as groceries, gas, or entertainment. Using credit cards for purchases you’d make anyway effectively reduces your monthly spending by a small amount.
Personal loans are another form of debt that may be useful when properly applied. For example, some may use personal loans to refinance and consolidate debt. This saves on interest, reduces their monthly payment, and decreases the number of debts they must juggle.
5) Earn extra income
Reducing spending and debt can help cover expenses, but there is a “floor” to these. Income, on the other hand, has a lot more room to expand. So, if you have time and ability, find a way to earn additional income. Start by striving for a raise at work if you haven’t recently received one. Note recent accomplishments and study ways to approach the conversation with your manager. A raise could instantly translate to extra monthly income.
Explore outside work as well. For instance, you could start an online side hustle as a freelancer or rent out a room in your home to make money outside of your primary occupation. Even if your main income covers all expenses, a second income can help you save extra for emergencies or reach goals faster.
Follow local laws relevant to your second income stream (such as renting out rooms), and don’t violate noncompete, moonlighting, or other clauses in your contract with your main employer.
Cover expenses more easily in 2025
The start of the New Year gives you a great milestone to make a plan for covering your expenses. Make a budget and build an emergency fund to set the foundation. Then, sell unused items to save more money and reorient your spending toward what you value.
Use debt wisely and seek ways to increase your income for long-term stability. Following these tips will equip you to feel more confident and in control of your day-to-day finances, making 2025 a year of financial success and well-being.
