The cold months are slowly behind us and in a few months, it will officially be summer. Summer is a great time of year for individuals and families to go on summer vacations, for backyard BBQs, go out to eat, and find other ways to relax. Summer can also be pretty expensive. Have you started planning for summer expenses?
Now is actually the best time of year to start saving and budgeting for the summer. According to financial expert Amy Richardson, CFP with Schwab Intelligent Portfolios Premium“ when you start saving before the summer season arrives, it gives you the opportunity to build up your savings over a longer period of time.
This reduces the impact on your short-term cash flow and helps ensure you don’t feel strapped to try to save quickly. It also takes the worry and stresses out of wondering how you’ll come up with the funds.
Planning for the summer is important to control your spending and create a monthly budget to help you enjoy the season in a way that won’t hurt your wallet! Below are a few good reasons to start planning for the summer now.
Know-How Much You Can Afford To Spend
The first step is to figure out how much you need to spend over the summer. It might not be what you’ll end up spending, but it will include all the things you want to do. Total up the possible expenses of all the trips you want to take and all the places you want to visit. Write this number down for later. If it seems high now, don’t worry.
Set a budget for each summer activity to prevent overspending. Pick a number that includes any required transportation, lodging, food, tickets and miscellaneous items (such as gas or souvenirs) then make your summer plans around this budget.
Redirect Your Intended Expenses Budget
As you go through your budget, see if you can swap out some winter expenses with costs you anticipate taking on over the summer. Look at it this way: Over the summer, you don’t have to blast your heat or turn the lights on at home at 4 p.m. because it’s dark outside. You also don’t have to do tons of holiday shopping or pay for huge family feasts.
Start a Saving Fund
Planning earlier also means you can start putting aside money every week or paycheck for your summer activities. Once you have an account set up, start a recurring transfer into the account each month. Automatic transfers eliminate the risk that you’ll forget a payment or accidentally use the funds for something else. One of the best parts about budgeting for the summer months is that there’s always something free or cheap to do if you get creative.
Shop for Deals
Make arrangements early so you’re not scrambling for accommodations during a peak season when others are also planning their own vacations. Saving a little each month toward your vacation can help avoid racking up debt on your credit card that you’ll have to deal with later.
To Avoid Surge Pricing
When you’re planning a vacation on a budget, it’s best to book things ahead of time so you can snag as many early bird discounts as possible. As you plan, keep the following in mind:
- Travel during less busy times. Midsummer tends to be peak travel time, especially for families with kids. If you’re from the northeast U.S., late summer is one of the best times to travel the southeast because students start returning to school in early August.
- Compare your options. Hotel or vacation rental? Flight or car rental? Depending on where you go, what you plan to do, and how early you’re looking, exploring your options and comparing prices can help you save some money right away.
- Keep an eye on price drops. Give yourself some time to grab deals that pop up over time. Even after you book things in advance, don’t forget to check back in now and then. If the price drops below what you paid, you may be able to rebook and get some money back
You Can Stay Local
Planning ahead allows you to look to local events. Summer fun doesn’t only happen far away. You can significantly reduce costs by taking advantage of nearby activities. Hiking trails, beaches, museums and festivals offer enjoyment without the cost of travel.
You can enjoy your summer and be financially responsible at the same time. Budgeting and tracking your spending may take some practice, but the more time in advance you’ve taken planning for summer, the easier it will be to stick to your budget while actually on vacation. For example, if you’ve already mapped out all of the free activities in the area you are staying, you won’t be left scrambling to come up with an itinerary after your flight lands and you’re worn out from travel.