9 Ways To Prepare for a Thinner Wallet in 2025

Worried that times might get tighter for you and your family next year? Whether you expect a pay cut or simply your expenses rising faster than your income, now is the time to start preparing for a pinched budget .

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Try these tips from financial experts to lighten the financial burden and the stress of a thinner wallet.

Also check out what poor people waste their money on .

Money mistakes the super wealthy never make - that you might be doing now.

1. Get Serious About Budgeting

Not everyone follows a strict budget. But if you foresee the financial vise tightening, you can’t afford to keep a loose watch on your wallet.

“The first step is to look at how much you’re spending now, and what you’re spending it on,” advises Julie Beckham, Financial Education Officer at Rockland Trust . “Then look at what, if anything, you’re currently putting aside for your future self.”

You don’t want to pull back on savings , even when your income dips. “Get into the habit of saving. Pick an amount you are comfortable setting aside from each paycheck — even $10 a paycheck adds up quickly. Automate your savings by setting up a recurring transfer into a savings account or even asking your company to directly deposit that portion of your check into a separate savings account.”

Erika Kullberg, founder of personal finance website Erika.com , recommends changing your budget now to reflect your future reality. “If you know your income is going to fall or expenses are going to rise, reduce spending or increase income right now, rather than waiting to adjust to the sensation of falling.”

Read More: 5 Unnecessary Bills You Should Stop Paying in 2024

2. Set Aside Money for Looming Costs

If you know a big bill is headed your way over the next year or two, start planning for it now.

“Think about preemptive budgeting for things like roofs or appliances that are nearing the end of their life,” suggests Eric Croak, CFP and president of Croak Capital . “If it’s not feasible to replace everything, prioritize and save for the most crucial items.”

The last thing you want is to be caught flat-footed by a major expense just as your income is falling or your other costs are rising.

3. Get in the Habit of Buying Used

You can’t (or shouldn’t) buy some things used, such as sheets. But other items work just as well secondhand as they do new.

“When it comes time to buy, go for used items,” adds Croak. “They’re much cheaper, and it’s hard to justify the cost of new ones with prices being what they are today.”

Some used furniture (indoor or outdoor) looks brand new. Some electronics and appliances work like new. The same goes for many clothes, toys, and kitchenware.

4. Explore Free Hobbies

They say the best things in life are free. So are many of the best experiences.

Annie Cole, a money coach and founder at Money Essentials for Women , says finding free hobbies has slashed her spending with no loss in quality of life. “The absolute best way to cut back on spending, without it being painful, is to fall in love with free or nearly free activities.

“In our consumer society, we often equate spending with happiness and being unable to spend freely with a lack of happiness. At the same time, most psychology research will tell you that happiness comes from joyful experiences, personal passions, and close social relationships!”

5. Learn To Cook

Cooking is not only a “free” hobby, it actually saves you money over the alternative: restaurant food.

The more you do it, the better your meals turn out, and the more you come to enjoy it. As you get better, you can also learn how to tweak recipes to make them healthier — with no loss in quality.

If you enjoy a glass of wine with your dinner, you can also start experimenting to find the best bargain wines on the market. There’s always a cheaper wine that tastes better, if you’re willing to taste blind.

6. Cut Subscriptions

We often don’t realize just how much we spend on subscriptions every year.

Christine Devane co-founded Brightfin , an app that helps you track your spending. “Look at your recurring expenses to see where you can cut. Often that includes canceling some unused subscriptions.”

Make sure you go back at least a year, to catch the annual subscriptions in addition to monthly fees.

7. House Hack

Housing makes up the single greatest expense for most families — by a lot. If you can reduce or eliminate the cost, you can free up huge amounts for savings.

The classic house hacking model involves buying a duplex or other small multifamily property, moving into one unit, and renting out the other(s). But you can also house hack by renting a room to a housemate, renting out storage space, parking space, or renting part of your home on Airbnb.

For that matter, you could rent your entire home on Airbnb when you’re not using it. Some young adults crash with their parents or significant other for example, on nights when their home gets booked on Airbnb.

Get creative and brainstorm ways to let other people cover your housing costs.

8. Don’t Rule Out Side Hustles

When the going gets tough, you can always earn extra cash to pad your pocketbook.

“Explore how you can supplement your income,” urges Devane. “Studies show that more than half of Gen Z have a side hustle. But do this sustainably — the activity you choose has to be something you truly don’t mind doing.”

While that can certainly include online freelance work that you can do from anywhere, it can also include skilled local work in a niche you love. Tim Fung founded Airtasker , which connects people to local “odd job” talent. “Being a Tasker is a great job for students or parents looking for part-time work, helping their neighbors with services like painting dog portraits, baking wedding cakes, or performing a mime act at a banquet.”

Again, the more creative you get, the more money you can earn, and the more fun you’ll have in the process.

9. Consider Aid

If you worry that no amount of lifestyle or budgeting changes will keep you afloat, look into aid programs that keep a roof over your head and food on your family’s table.

“If the drop in income is pretty big, it’s smart to know your options for assistance,” notes Croak. “Websites like GovBenefits.gov can guide you to programs like SNAP or local resources like food banks.

“It’s better to know about these before you’re in dire need.”

Final Thoughts

When financial worries keep you awake at night, do a simple exercise of remembering the budget you lived on five or ten years ago.

You probably weren’t miserable. You found a way to make it work. Sure, you’ve gotten in the habit of spending more recently, but you can scale back your budget once more if lean times come around again.

Lastly, don’t be afraid to share your fears with friends and family. They’ll reassure you that everyone goes through tighter times in their finances, and that ultimately you aren’t alone — even it feels that way.

This article originally appeared on GOBankingRates.com : 9 Ways To Prepare for a Thinner Wallet in 2025