Ahh…summer! The season of flip-flops and sunscreen, of lemonade and baseball games. What’s not to love? Unfortunately, though, summer is also the season of overspending for many, and nothing kills summer fun like a busted budget and a mountain of debt. So, how can you stay financially fit this summer?
Keeping your finances intact throughout the summer is well within reach if you’re ready to plan ahead and make responsible choices. Here are four hacks for a summer of financial fitness.
1. Prepare for an income decrease
If you’re a freelancer, business owner, or even a teacher, you might expect to see a drop in income during the summer months. If you think this might be the case for you, it’s best to be prepared. To avoid dipping into savings or going into debt, you can trim your discretionary spending and use the extra funds to cover non-discretionary expenses. You can also find a side hustle for the summer to cover the gap in your income.
2. Get your budget ready for summer
Your budget will see some changes in the summertime, and it’s a good idea to prepare in advance instead of being caught unaware. Here are some changes you can anticipate:
- Higher utility bills. With the AC blasting, your energy costs will likely be higher. Water costs can rise, too, especially if you water your lawn and any outdoor plants and flowers on a regular basis.
- Increase in fuel prices. Just when you thought it couldn’t go any higher, the price of fuel is likely to jump again in the summer.
- Travel expenses. Of course, if you’ll be traveling this summer, it’s going to cost you. If you haven’t yet budgeted for your getaway, start saving up and/or trimming costs from other categories in your budget now.
- Social events. It’s wedding season, and they don’t come cheap, even if you’re not the one in the white gown. You may also receive invites or host other events during the summer months, such as family reunions, block parties, anniversary celebrations and more. It’s best to budget for gifts, the travel costs of attending these events and of course, for the expense of hosting, if applicable.
- Activities for kids. School’s out, and the kids need to be kept busy. Aim for free activities whenever possible, but you may want to set aside some funds in your budget for occasional activities that have a price tag attached.
3. Create a vacation budget
Aside from adjusting your monthly spending plan, you’ll want to build a workable budget for your summer getaway to avoid overspending. It’s very likely you’ll make better money choices if you make them in advance, so plan for every conceivable expense during your vacation.
Attach a dollar amount for your hotel stay, car rental, food costs, transportation expenses, entertainment and outings, gifts, and any other cost you might have. Leave a bit of wiggle room for miscalculations, but try to keep your budget as close to the actual cost as possible.
While on vacation, be careful not to go over budget and be open to a last-minute change of plans if some expenses end up being substantially higher than expected.
4. Review and adjust as necessary
Once you’ve blown your budget, it can sometimes feel like you should just go all out and overspend without sparing a thought to the consequences. To avoid falling into this trap, resolve to review your budget and spending regularly throughout the summer.
You can choose to do this weekly, or bi-weekly, but be sure to take a careful account of every dollar in and every dollar out. Being aware of the state of your finances in real-time instead of waking up after the damage has been done will make it easier to make responsible choices going forward.
The temptation to overspend is especially strong during the summer. Follow these tips to keep your finances intact throughout the summer, and check out more posts like this on our MoneySmart Tips blog.
Your Turn: How do you plan to stay financially fit this summer? Share your tips with us in the comments.
