Estimated reading time: 11 minutes
If you didn’t conduct a finance review of your 2024 budget, that’s ok because you’ll learn how to do it in 2025 for next year.
It’s hard to believe that in 2012, our grocery budget for two adults was $235, and now in 2025, it’s over $900.
However, a few things have changed over the years for our family, such as;
- Our son was born in 2014.
- We have a picky eater due to sensory processing disorder and autism.
- Our diet has changed but not dramatically as we still shop sales, use coupons, mobile apps, reward points, and check the reduced rack at the grocery store.
According to a recent TD Bank survey, 24% of respondents were cautiously optimistic about their financial outlook going into 2025.
That means they hope things will change but still have their financial guard up.
Although saving money was high on the financial solutions for the new year, 61% of respondents said they either wanted to save more money, pay down debt, or cut down on spending.
Honestly, I don’t find any of the resolutions far-fetched but rather common although more Canadians are realizing just how important a budget will be for them in 2025.
Nobody is waiting to hold your hand if you’re put out into the street, lose your job, or get sick and cannot return to work.
Although work benefits or unemployment insurance covers some of these potential events, it’s not near enough to survive.
Let’s not forget those who are disabled and older people who are retired and living on a limited pension without retirement savings.
There’s so much to unpack regarding a finance review of your previous year’s expenses that it will be challenging but doable if you don’t have the data.
Budgets and resolutions are better than nothing since we all must start somewhere.
What Is A Finance Review?
A finance review in our household is when we tally up all of our budget expenses by category at the end of the year.
Doing so allows us to see whether we spent more or less in each category to help create our b budget for the following year.
The review process also allows us to set realistic financial goals, such as spending less or challenging ourselves.
How Do You Conduct A Finance Review?
- Add up the final budget expenses for each month of the previous year. In this case, we calculated for 2024.
- Take the budgeted monthly expense and multiply it by 12 to give you a total of the year’s budgeted amount. Take that number and subtract it from the actual yearly total expense.
- Now, you should know whether you spent too much or too little for each budget category.
- Using your net income for the year, you should be able to create a new budget for 2025. Given the numbers you have from 2024, you can either increase, decrease, or delete a budget category. For example, you can delete a category if you paid off your debt.
For example, in 2024, we budgeted $100 for our annual allowance of $1200.
Once I added up each month of allowance expenses for 2024, I found out that we had spent $1362.93.
We spent more than we should have in the allowance category by $162.93.
At this point, we can either increase our allowance to align with the overage, which could have been due to inflation, or other increased prices throughout the year.
Or, we can keep the allowance category the same at $50 each month.
Lastly, if we can no longer afford the allowance category, we can reduce or delete it accordingly.
Do this for every budget category.
Household Percentages Finance Review 2024 Budget
After an in-depth finance review, the following household percentages were achieved.
If you’re new here and before you continue reading, I want to say that we paid our mortgage off in 2014.
For this reason, you will see nothing for a mortgage or rent.
I paid $47,000 cash for my truck as a floor model 2017, so we have zero debt.
As you can see, our life ratio came in at 31.8% (should be 25% or less), which is over budget, so that will be our focus in 2025.
The other household percentages were under or over our expectations, but in a good way.
Budgeted Amounts Per Category 2024
Below is our monthly budget for 2024. You can read the 12 monthly budget updates from 2024 to understand where our money was spent.
2024 Budget Categories Finance Review
Below are the final review numbers of all the money we spent in each budget category for 2024.
Seeing how much money each category adds up after it’s spent is always mind-blowing.
It’s one thing to create a budget and another to know that you’ve spent it.
New 2025 Zero-Based Budget Category Amounts
Established from our 2024 finance review numbers, our new 2025 Zero-Based Budget is below.
2024 vs. 2025 Monthly Budget
Based on our finance review for 2024, we will realize a $210.96 increase in our 2025 monthly budget.
All budget categories for 2024 were $8179.33 and will now be $8390.29 in 2025.
$8390.29-$8179.33= +$210.96 monthly
Budget Category Amounts That Changed For 2025
If a budget category is a fixed expense or one where we know the bill’s monthly total, I will not explain that below.
By reading the charts above, you will understand that our property taxes have increased from $415 monthly to $458.33 and that our son’s RESP stays at $208.33 monthly.
So, below are all of the affected budget categories that caused us grief or we have something to say about them.
Allowance
Although there were months when we both exceeded our allowance of $50 each, we are keeping this figure the same.
We need to do better and keep reminding ourselves that we have $50, so the plan is a cash allowance diet.
Monthly, we will get $50 cash to spend, and once that’s gone, there’s no negotiating.
Car/Home Insurance
We moved to Belair directly for home and vehicle insurance, not by choice, as the company rebranded from Johnson Insurance.
The cost went up $10 in 2024, but we waited until the yearly finance review to make the change.
However, if you are on a tight budget, I would advise you to make the change as soon as you know the expenses have changed.
Christmas + Reserve
Miracles do happen! We spent less than our projected budget for Christmas and reserved cash for holiday groceries in 2024.
There are a couple of reasons why this may have happened.
- Our son didn’t want much for Christmas, which was pricey.
- We didn’t host Christmas or New Year’s Eve (we went to bed early).
For this reason, after our finance review, we have reduced our Christmas budget from $341 monthly to $225.
That’s a savings of $116 monthly or $1392 annually.
Clothing
For the 2025 year, we have vowed not to spend any money on clothing for any of us unless it is necessary.
For example, our son has a growth spurt, and his trousers no longer fit him.
Perhaps his running shoes have a hole, and he needs a replacement pair.
Since he likes to misplace items, we may have to replace them, although he is improving.
Mrs. CBB and I are well stocked for clothing, shoes, and jackets, so we hope to spend nothing on us.
For 2025, we’ve reduced our clothing project expenses from $325 monthly to $100.
That’s a savings of $225 monthly or $270. However, we will save a further $1200 if we don’t spend anything.
Let’s see how this year goes. I’ll update everyone in the monthly budget post.
Emergency Savings Fund
Any money left after our budget categories are accounted for gets funneled into our emergency savings fund.
Entertainment
Anything we do as a family, such as visiting a farm, going to the muesem, or having dinner out, will fall under this category.
In 2024, we spent $699 on entertainment, which was over budget, but we decided not to change the amount to $56 for 2025.
Grocery
Our grocery budget in 2024 was $900, and after consideration, we decided to increase the monthly total to $960.
Grocery prices have increased so much that we have challenged ourselves to a low and no-spend grocery year.
I created a special Facebook page for anyone wanting to join the challenge. Reply to this post and let me know or comment below.
We’re hoping the increase won’t be used, and perhaps we might spend less than in 2025.
I’ll document this in our monthly budget if you want to follow it.
Health and Beauty
From $270 to $485 monthly is a massive jump, but we have noticed more of an increase in health and beauty than in groceries.
I’m unsure if that will be a blip, but we will move on to 2025 and see this budget category decrease.
Prescriptions
There will be a small increase in our prescriptions from $106 to $120, which is self-explanatory.
Shoppers Drug Mart is overpriced, and yes, we know we can move and might.
Holiday/Vacation
from $100 to $110
I went to the UK in 2024 for my mum’s funeral and realized that flight prices and everything else increased.
Although a $10 increase in the holiday budget seems small, we have been saving for years.
Knowing that we are setting more aside is our little peace of mind.
Kids
from $150 to $160
Our son doesn’t need much, but this is where it will go when there is an expense outside of soccer.
The slight increase is due to him getting older and things costing more, and inflation.
Memberships/Clubs/Sports
Our son plays soccer year-round between 2 to 3 times weekly, depending on the season.
The increase from $116 to $165 covers our son’s soccer for the entire year, including shoes, knee pads, and goalie gloves.
Parking
The increase from $45 to $68.30 covers McMaster Hospital’s yearly parking pass and employer parking.
There are random other parking fees, such as our local hospital and if we head into Toronto or Hamilton, that are factored into the projected expense.
Telecommunications
Our telecommunications category increased from $180 to $222, covering Rogers, Microsoft, Spotify, and Freedom Mobile expenses.
Near the end of the year, Mrs. CBB increased her data to unlimited on mobile devices for $5.
Whenever we leave the house, our son brings his tablet as it helps to regulate him as he is autistic.
It was easier to add the unlimited data so that he could use it instead of going over and paying a fortune.
Extended Healthcare
My work benefits cover $4000 for speech and occupational therapy (among many others available).
The cost of speech therapy increased from $125 to $135, which we saved to pay our portion of what my benefits do not cover after 80%.
Last year, we ended up paying out of pocket for the last few sessions as the $4000 was used for occupational therapy and his psychological and autism assessment.
