4 simple ways to free up more money in your budget next year

With lingering high prices from inflation, soaring interest rates on credit cards and loans and the pressure of holiday gifting upon us, cash is tight for many Americans.

It doesn't have to be that way, though. 

According to experts, there are many ways you can free up funds going into the new year and ease that budgetary stress — even as the holidays close in. 

Find out how a debt relief program could free up more money in your budget.

4 simple ways to free up more money in your budget next year

Are you looking to free up money as we head into 2025? Here are four ways pros say to do it. 

Take a hard look at your expenses

If your budget is feeling tight, analyzing your expenditures is always a great place to start, or as Stephan Shipe, owner of Scholar Financial Advising, puts it, "perform a post-mortem on your 2024 expenses." 

Start a spreadsheet, and make note of all you spent in the last couple of months — detailing the amount and what it went toward. 

"The easiest way to reduce expenses thoroughly is to evaluate monthly subscriptions and make sure you are not paying for services you no longer use," says Curt Scott, president of Scott Financial Group. "Smartphone apps, streaming services, cell phone add-ons, gym and other memberships can add up very quickly and account for a substantial portion of someone's disposable income."

You can also look for new providers, like a new insurance company for your car or home insurance policies or a new internet or cable company, as they could offer lower pricing than what you're currently paying. 

"I find that people typically forget that they have the ability to negotiate, too," Shipe says. "Ask for discounts for bundling services or negotiate new rates with providers."

Explore the debt relief options available to you here.

Refinance or consolidate your debts

If you have a lot of debt in your name, reducing what you pay on those debts can help free up cash, too.

One option is to refinance your debt, which would allow you to potentially reduce your interest rate and monthly payment. This may be an option on mortgages, car loans and even student loans.

After all, the three rate cuts that the Federal Reserve has conducted in 2024 have resulted in rates dropping by a full percentage point. 

"With this level of reduction, it may be in your financial interest to refinance any debts acquired prior," says Troy Young, founder of Destiny Financial Group. 

Consolidating your debts is another strategy. This is when you use a lower-rate loan to pay off all your debts and card balances, essentially rolling them all into one lower monthly payment. 

"You can also explore using a balance transfer from one credit card — normally a high-interest credit card is 19%-plus — and transferring the balance to a credit card that allows 0% interest for a period of time," says Jordan Mangaliman, founder of GoldLine Financial. "The 0% interest rate is typically valid for 6 to 12 months, which gives you more time to pay off your debt without any interest."

Sell, sell, sell

You can also consider selling items you no longer use or, as Scott recommends, "items that new Christmas gifts can replace."

"Reselling items has become a huge market," Mangaliman says. "You can sell old items you may not need or use like watches, clothing, and even a car that you may not be using."

Just make sure you're realistic about what you'll get from those sales, Scott says.

"While you won't recoup 100% of the original cost, you may be able to get $0.30 on the dollar by selling items you no longer need," Scott says. "This is a great way to make room for new toys, clean out the closet, and repurpose things you no longer need or use."

Adjust your W-4

If you got a tax refund this year, you're essentially "providing the government an interest-free loan," Young says, and keeping less cash in your pockets throughout the year.

"If your refund in 2023 was, say, $1,200, on average, you loaned the government $100 per month," Young says. "What could you do with an additional $100? If that refund is $3,000 you are looking at $250 per month."

To prevent this in 2025, talk to your HR office and ask to adjust withholdings on your W-4 form. If you're not sure how much of an adjustment to make, talk to your tax advisor. They can help you calculate the appropriate amount for your goals and tax liabilities. 

The bottom line

If you do manage to free up cash, Young says to make sure you're careful about where you put those extra dollars.

"Don't take that savings and spend it, consume it," Young says. "Apply it towards debt elimination, a savings goal, an investment plan, or retirement."

And if debts are what's holding you back from your financial goals, explore debt relief options like debt settlement, debt consolidation or a debt management plan. Talking to a financial advisor or credit counselor can also help.