You’ve probably heard that money can’t buy happiness, but it certainly can buy those fantastic experiences that make summer memorable. Whether it’s a European vacation, rooftop cocktails, or tickets to a summer tour, these experiences can elevate your warm-weather months. However, they can also accumulate quickly, leaving a significant dent in your bank account.
If you didn’t budget for your summer spending properly, you might find yourself entering fall feeling financially stretched. Don’t fret; you’re not alone. Summer often leads to increased spending as we take full advantage of the great weather before hunkering down indoors during the winter months. Read on for expert-backed tips to help you get your finances back on track after months of summer splurging.
Try a No-Spend Month
It may sound extreme, but after months of overspending, a no-spend month can serve as a helpful reset. During this period, you abstain from purchasing non-essentials. Strict rules, like limiting spending to groceries, gas, and recurring monthly bills, work best. A no-spend month can help you reevaluate what truly deserves your money. Items like a new bikini or sundress might seem essential during the summer, but come fall, you may realize you’re content with your existing wardrobe and would prefer to save your money.
Create a Zero-Based Budget
Several budgeting methods are available, but Ashley Lapato, of the budgeting app YNAB and known as @TheOrganizedWallet on TikTok, suggests using a zero-based budget. With this approach, you allocate your income to various categories, ensuring that every dollar you earn has a specific purpose. This strategy allows you to plan your spending in advance while providing the flexibility to reallocate funds as your needs change. Assigning every dollar a “job” helps you identify your true priorities and find areas where you can save.
Participate in a Money-Saving Challenge
Saving money may not be as exciting as spending it, but money-saving challenges can make the process more enjoyable. Challenges like the Penny Saving Challenge, the 20K Savings Challenge, or the Dime Saving Challenge come with specific timeframes and savings goals. By trying out different saving methods, you can keep the process fresh and engaging, preventing boredom from setting in.
Use a Debt Reduction Strategy
If you financed your summer adventures with credit cards, you might be facing more debt than you’re comfortable with. Paying off credit card bills, especially with interest, can feel like an uphill battle. Two proven debt reduction strategies are the debt avalanche and debt snowball methods. Debt avalanche prioritizes paying off high-interest debt first while making minimum payments on other debts, saving you money in the long run. Debt snowball, on the other hand, focuses on clearing the smallest balance first, providing quick wins to keep you motivated.
Automate Your Savings
If you dipped into your savings to fund your summer activities, it’s time to rebuild your emergency funds. To ensure consistency, consider automating your savings. You can set up direct deposit to transfer a portion of your paycheck directly into your savings account. This way, the temptation to spend that money disappears. Opening multiple savings accounts for different financial goals, such as a home down payment, emergencies, or an upcoming trip, can help you keep track of your savings. If you want to keep your savings separate from your checking account, a high-yield savings account can provide growth through high annual percentage yields, fostering an “out of sight, out of mind” mindset.
Plan Ahead for Next Summer
While you can’t change this year’s spending, you can set yourself up for a successful next summer. Planning and budgeting before the season arrives can help you take full advantage of the warmer months and prevent overspending. During the spring, reevaluate your budget to determine how much money you can allocate to summer fun once the season arrives. Common summer expenses to budget for include vacations, bachelorette parties, weddings, higher electricity bills due to air conditioning use, and festival or concert tickets. Preparing for these expenses in advance will let you enjoy summer next year with less financial stress when fall arrives.