There are many temptations of summer spending. Long days, travel and camping for kids are just a few of the places where our money ends during the warm months.
“The summer costs us that we may not have the rest of the year,” says April Stewart, a financial coach who helps high-income people control their money and build wealth.
“In many cases, we tend to overuse when we’re not intentional,” she adds.
Stewart and other money experts say they still have time to plan ahead this summer, or even next summer. Here’s how:
1. Decide where you want to go with your money
“Be clear about how you spend your money,” says Keina Newell, a financial coach who specializes in supporting single women.
You want to plan not only your bills, but also your fun summer spending, she says. “Let’s see how you want to spend your time, maybe engage in the experience and eat more outside.”
To help you reflect, she suggests that you look back on what you enjoyed spending money over the past year and what you didn’t. Where was your best return on investment?
These are areas where you want to prioritize in favor of other things.
Setting a budget for these fun activities will allow you to spend the season and enjoy yourself, and you can also build guardrails. This is an approach she likes to call “permit budgeting.”
2. Mapping (and planning) large costs
Knowing what you want to buy in advance gives you the opportunity to secure cash to fund these expenses.
You can get started with a budget spreadsheet. He estimates upcoming costs, including things that go up in the summer, including travel, family celebrations, air conditioning bills and summer camp costs, Stewart says.
Stewart suggests including items such as graduation ceremonies and baby showers in your summer budget. Otherwise, she says it’s easy to use it by chance.
3. Install cushions
Even the best planners can take a hit at unexpected costs in the summer months. The air conditioner unit may break, the car may overheat, or the travel plans may be malfunctioning.
To prepare for these types of surprises, Stewart suggests leaving a cash cushion in your checking account. You can also create separate savings accounts for these funds. That way, you don’t have to resort to credit card debt or other high-profit loans to fund your emergency.
“Create a summer savings account and make sure your money is set aside,” she suggests.
More savings are always better, but even securing $1-200 can go a long way if you suddenly need cash.
4. Say “No” to your friends (occasionally)
If the money is tight, Newell says your friend is probably on the same boat.
Telling a friend you want to do less can lead to helpful conversations about how to enjoy it on a budget. You can host potlucks, skip large group trips in favor of local fun, or find free concerts instead of ticketed venues.
Newell says that budgeting “doesn’t make you sound cheap,” but it helps normalize talking about money with friends.
“It’s okay to say ‘No’,” Stewart says when a friend asks you to spend money on activities you don’t enjoy.
“I set my boundaries,” she says. And if the activity pops up, you’ll need to resort to credit card debt or immerse yourself in emergency funds.
“If you can’t have cash flow, that’s no.”
5. Move immediately from slip-up
If you regret splurge on concert tickets or a big night out, it’s fine – you can still recover and learn from mistakes.
“All your spending is data,” says Newell. Check it, look back and learn from slip-ups.
She says by cataloging what happened so that she can make another choice next time, she will turn the experience into something convenient, rather than a sankable cost.
6. Avoid Trigger Expenses
Looking back at your spending, you may notice certain triggers that will lead to more spending.
For example, the introduction of late-night commands can lead to online shopping, so you can choose to skip scrolling when you’re tired, says Newell.
Severine Brian, a certified financial counselor who helps women rebuild after divorce and other challenges, says he has learned to be vigilant against overexpenditure on rainy days.
“I just want comfortable food,” she says, the drops start to fall.
Instead of ordering expensive takeaways on a recent rainy day, Brian opted to pick up soups at a local chain restaurant. It satisfied her cravings in an affordable way.
Finding affordable alternatives to expensive desires can help keep summer spending down, says Brian.
“It’s okay to get something lower than the price from time to time,” she says. “I’m not going to spend $50, but I’ll spend $10 to satisfy that craving.”
Similarly, if you need summer holidays but are outside of this year’s budget, you can instead plan a fun staycation, adds Brian.
“We want to find a lovely sweet spot where you enjoy your life, but with your goals in mind.”
7. Find free fun
The advantage of summer is that it comes with a lot of free activities, says Brian. Local parks, libraries and community centres often offer free entertainment, including volunteer opportunities.
“You’re not only enjoying yourself, you’re making memories,” she says.
Kimberly Palmer writes for Nald Wallet. Email: kpalmer@nerdwallet.com. Twitter: @kimberlypalmer.
Article 7 method for managing the summer spending epidemic originally appeared in Nerdwallet.
