diff --git a/litellm/proxy/auth/auth_checks.py b/litellm/proxy/auth/auth_checks.py
index 45007861d55..6eae9d0d475 100644
--- a/litellm/proxy/auth/auth_checks.py
+++ b/litellm/proxy/auth/auth_checks.py
@@ -3516,10 +3516,13 @@ async def _virtual_key_max_budget_check(
     if valid_token.max_budget is not None:
         from litellm.proxy.proxy_server import get_current_spend
 
+        fallback_spend = valid_token.spend or 0.0
+        counter_key = f"spend:key:{valid_token.token}"
+
         # Read spend from cross-pod counter (Redis-first) or cached object (fallback)
         spend = await get_current_spend(
-            counter_key=f"spend:key:{valid_token.token}",
-            fallback_spend=valid_token.spend or 0.0,
+            counter_key=counter_key,
+            fallback_spend=fallback_spend,
         )
 
         ####################################
diff --git a/litellm/proxy/management_endpoints/key_management_endpoints.py b/litellm/proxy/management_endpoints/key_management_endpoints.py
index dd057f4c3fc..eba16c077b0 100644
--- a/litellm/proxy/management_endpoints/key_management_endpoints.py
+++ b/litellm/proxy/management_endpoints/key_management_endpoints.py
@@ -2587,6 +2587,17 @@ async def update_key_fn(  # noqa: PLR0915
             proxy_logging_obj=proxy_logging_obj,
         )
 
+        if data.spend is not None:
+            try:
+                from litellm.proxy.proxy_server import _invalidate_spend_counter
+
+                token_to_invalidate = _hash_token_if_needed(key)
+                await _invalidate_spend_counter(
+                    counter_key=f"spend:key:{token_to_invalidate}"
+                )
+            except Exception:
+                pass
+
         asyncio.create_task(
             KeyManagementEventHooks.async_key_updated_hook(
                 data=data,
@@ -4774,6 +4785,13 @@ async def reset_key_spend_fn(
             proxy_logging_obj=proxy_logging_obj,
         )
 
+        try:
+            from litellm.proxy.proxy_server import _invalidate_spend_counter
+
+            await _invalidate_spend_counter(counter_key=f"spend:key:{hashed_api_key}")
+        except Exception:
+            pass
+
         max_budget = updated_key.max_budget
         budget_reset_at = updated_key.budget_reset_at
 
diff --git a/tests/test_litellm/proxy/auth/test_auth_checks.py b/tests/test_litellm/proxy/auth/test_auth_checks.py
index 42c76c4671d..e14ef05bd43 100644
--- a/tests/test_litellm/proxy/auth/test_auth_checks.py
+++ b/tests/test_litellm/proxy/auth/test_auth_checks.py
@@ -2409,6 +2409,8 @@ async def test_virtual_key_budget_check_fallback_no_counter():
         assert exc_info.value.current_cost == 15.0
 
 
+
+
 @pytest.mark.asyncio
 async def test_team_budget_check_reads_from_spend_counter():
     """Team budget check should use get_current_spend when counter exists."""
diff --git a/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py b/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py
index 987ff3fbe98..473d61f8a85 100644
--- a/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py
+++ b/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py
@@ -6496,6 +6496,9 @@ async def test_reset_key_spend_success(monkeypatch):
         patch(
             "litellm.proxy.management_endpoints.key_management_endpoints._delete_cache_key_object"
         ) as mock_delete_cache,
+        patch(
+            "litellm.proxy.proxy_server._invalidate_spend_counter"
+        ) as mock_invalidate,
     ):
         mock_hash_token.return_value = hashed_key
         mock_check_admin.return_value = None
@@ -6520,6 +6523,76 @@ async def test_reset_key_spend_success(monkeypatch):
         assert response["max_budget"] == 200.0
         mock_prisma_client.db.litellm_verificationtoken.update.assert_called_once()
         mock_delete_cache.assert_awaited_once()
+        mock_invalidate.assert_awaited_once_with(counter_key=f"spend:key:{hashed_key}")
+
+
+@pytest.mark.asyncio
+async def test_update_key_spend_invalidates_counter(monkeypatch):
+    """
+    Test that updating a key's spend via update_key_fn immediately invalidates the spend counter.
+    """
+    from litellm.proxy.management_endpoints.key_management_endpoints import (
+        update_key_fn,
+    )
+
+    mock_prisma_client = AsyncMock()
+    mock_user_api_key_cache = AsyncMock()
+    mock_proxy_logging_obj = MagicMock()
+
+    hashed_key = "0d62f396c1317066f55a96086517047c737087c61eb2bf016b72e6298927b15b"
+    key_in_db = LiteLLM_VerificationToken(
+        token=hashed_key,
+        user_id="test-user",
+        spend=10.0,
+        max_budget=200.0,
+        litellm_budget_table=None,
+    )
+
+    mock_prisma_client.get_data = AsyncMock(return_value=key_in_db)
+    mock_prisma_client.update_data = AsyncMock(return_value={"data": {"spend": 0.0}})
+    mock_prisma_client.db.litellm_verificationtoken.find_unique = AsyncMock(
+        return_value=key_in_db
+    )
+
+    monkeypatch.setattr("litellm.proxy.proxy_server.prisma_client", mock_prisma_client)
+    monkeypatch.setattr(
+        "litellm.proxy.proxy_server.user_api_key_cache", mock_user_api_key_cache
+    )
+    monkeypatch.setattr(
+        "litellm.proxy.proxy_server.proxy_logging_obj", mock_proxy_logging_obj
+    )
+    monkeypatch.setattr("litellm.proxy.proxy_server.llm_router", None)
+    monkeypatch.setattr("litellm.proxy.proxy_server.premium_user", True)
+    monkeypatch.setattr("litellm.store_audit_logs", False)
+
+    with (
+        patch(
+            "litellm.proxy.management_endpoints.key_management_endpoints._delete_cache_key_object"
+        ) as mock_delete_cache,
+        patch(
+            "litellm.proxy.proxy_server._invalidate_spend_counter"
+        ) as mock_invalidate,
+    ):
+        mock_delete_cache.return_value = None
+
+        user_api_key_dict = UserAPIKeyAuth(
+            user_role=LitellmUserRoles.PROXY_ADMIN,
+            api_key="sk-admin",
+            user_id="admin-user",
+        )
+
+        mock_request = MagicMock()
+        mock_request.query_params = {}
+
+        await update_key_fn(
+            request=mock_request,
+            data=UpdateKeyRequest(key="sk-test-key", spend=0.0),
+            user_api_key_dict=user_api_key_dict,
+            litellm_changed_by=None,
+        )
+
+        mock_delete_cache.assert_awaited_once()
+        mock_invalidate.assert_awaited_once_with(counter_key=f"spend:key:{hashed_key}")
 
 
 @pytest.mark.asyncio