Summer is a time when my life is turned completely upside down. My adjunct-professor husband has more time on his hands, and it’s not uncommon for him to plan a spur-of-the-moment barbecue or whisk our family away to a minor league ballgame in nearby Salt Lake City after scoring last-minute discount tickets. On top of that, my son is home from school.
My work schedule changes, and all of this summer fun leads to more expenses as well. It’s easy to get caught up in the summer fun and lose sight of those financial goals that you’re trying to accomplish, such as paying your mortgage off faster or saving for retirement. If you aren’t careful, your short-term summer fun can turn into a financial burden that you could be paying for in the months — or even years — to come.
One of the best ways to stay on top of your summer budget is to plan ahead. If you know that you spend more during the summer months, open a high-yield savings account and divert money to it every month. Make this your “summer fund” and use that money when you want to throw a great Fourth of July bash for your neighborhood, or when you want to upgrade the inflatable kiddie pool in the backyard.
If you know that you are likely to spend an extra $2,000 over the course of the summer, set aside $200 a month from August to May. You’ll spread out the cost of your summer, and you won’t jeopardize your other financial goals to enjoy your summer. Plus, it’s easier to think in terms of finding ways to earn an extra $200 a month than it is to face the task of banking $2,000 all at once.
Learn to Say No
At times, though, you have to say no. Your kids can’t go to all the day camps, and a three-week vacation might not be feasible this year. Before you get too involved with summer, take a step back and evaluate what you want to do.
Does an activity fit with your values and what’s important to you? If not, perhaps you should find something else to do. Also, consider what you need to do to make it happen. If you are thinking about taking money from your emergency fund or your retirement account to make your summer fun, or if you will have to go into debt, that’s a red flag. Think about the long-term repercussions and what you might give up in the future. Remember that you have long-term goals for financial freedom, and you don’t want to put them at risk.
Don’t forget that it’s also possible to say “not right now.” If you want to take a two-week vacation with your family, you can do that — but maybe not this summer. Estimate costs and make a plan to take the vacation this summer or next summer. See this post for affordable summer vacation ideas. Your “summer fund” will do well for incidentals like a weekend getaway or a big family party, but it’s not usually something that will allow you to take a big trip. Something like that requires additional planning and saving.
Your summer can be fun, but you don’t want it to break the bank. Before summer starts, take a step back, remind yourself of your long-term financial goals, and have a family meeting about what you can do to keep the excitement of summer from busting your budget.