The summer season is in full force, and so is that temptation to go on a spending spree. Along with the pleasures of beach trips, barbecues, eating out at restaurants, and outdoor adventures comes a not-so-welcome guest — seasonal expenses.
It’s vital to manage your budget before slipping into the murky waters of overspending during this vibrant season. Here are eight tips to help make your summer memorable without breaking the bank.
Understand Your Seasonal Expenses
Before jumping full force into summer, consider any and all potential expenses and your ability to afford them.
- Take note of all possible expenses for upcoming vacations — including activities, gifts, and memorabilia costs.
- Have a budget for everyday activities like picnics, amusement park visits, entertainment, camping trips, and recreational sports.
- Include expenses for home improvement projects like landscaping, gardening, and repairs which ideally happen during summer.
- Set aside funds for seasonal necessities — lighter clothing, swimwear, sunglasses, sunscreen, etc.
- Make provisions for an increase in utility bills from using AC units or the filter on your pool running all summer.
- Set aside funds for gifts, outfits, and transportation for seasonal events like weddings, community fun fares, and birthdays.
Create a Budget for Seasonal Expenses
Assess your current financial situation and choose a budgeting principle that aligns with your financial situation to manage your spending. Examples of budgeting strategies include:
- The 50/20/30 budgeting principleallocates 50% of your income to necessities, 20% to savings, retirement plans, and debt repayment, and 30% to fun summer activities.
- The 80/20 rule assigns 80% of your income to essentials and 20% to savings and discretionary spending.
- Reverse budgeting prioritizes saving a specific amount of your income before spending and using the remainder without any restriction.
- Create sinking funds to cover your anticipated summer expenses.
- Use the envelope system to allocate cash into different envelopes labeled with specific expense categories. Once you finish all the money in an envelope, you no longer spend money in that category until the following month.
Prioritize and Cut Costs
Avoid overspending by developing a seasonal expenses priority list. Categorize your expenses as essential or non-essential. Cut back on the non-essentials. Find cost-effective or free alternatives like researching deals and coupons.
Plan Affordable Summer Trips
You can still include a summer getaway or mini-vacation in your itinerary with proper planning to make it affordable.
- Plan in advance by booking flights and accommodations early to secure better deals.
- Be flexible with travel dates and destinations to take advantage of cheaper options.
- Consider alternative accommodations like vacation rentals or campsites.
- Pack your own snacks and drinks to avoid expensive tourist spots.
- Research and utilize local discounts, free attractions, and public transportation.
Stay Mindful of Energy Usage
Keep your utility bills in check. Be mindful of your energy spending by:
- Increasing your thermostat temperature settings and using fans to circulate cool air.
- Using natural lighting and avoiding unnecessary artificial lights during the day.
- Limiting the use of energy-intensive appliances during peak hours.
- Opting for outdoor activities to reduce indoor cooling needs.
- Using natural ventilation to keep your air conditioning from running the whole day
Avoid Impulse Purchases
The classic "wants vs. needs" struggle we all face. Avoid listening to those impulses by:
- Creating a list of planned purchases and sticking to it.
- Implementing a cooling-off period before making non-essential purchases.
- Unsubscribing from marketing emails and online shopping apps.
- Practicing mindful spending by prioritizing necessities over wants.
- Looking for ways to save money without compromising on enjoyment
Reassess and Adjust
Always evaluate your budget throughout the summer season to discourage overspending. Make sure to have an emergency fund to help counter the unpredictability of life. Always have alternative solutions to accommodate sudden changes and reduce your expenditure.
Start Making Your Mid-Year Assessment Today
Summer is not an excuse to make poor financial decisions. Review your year's financial goals and objectives and align them with the season's demands. With a well-planned budget, prioritization, and a mindful approach, you can enjoy the summer while keeping your finances in check. Start your financial assessment today and make the necessary adjustments.
As always, our financial professionals are ready to assist you with utilizing these tips and more to help reduce any preventable expenses.