As a financial planner, one of the most common complaints I hear from clients is that they do a great job of budgeting month to month, but things like vacations and holidays throw their budget completely off-kilter.
It can be difficult to financially manage all the big expenses that come with summertime. Kids’ summer camp, family vacations or invitations to concerts and days at the lake – so much of summer fun can come with a price tag. We all know that life comes in cycles, and it’s important that our budgeting and financial goal-setting include seasonal expenses. With summer holidays right around the corner, make sure you’re well-poised to both enjoy your summer and meet your financial goals.
Here are five ways to set yourself up for financial success this summer:
1. Review last summer’s spending.
One of the biggest mistakes I see individuals make when setting a budget is using arbitrary numbers not based on reality. To have a concrete, realistic budget, it’s important that you review your actual spending numbers to get a sense of your baseline. One of the quickest ways to gauge an appropriate budget number is to see where your money went last year. To set your summer budget and fund this year’s fun, review your May through September bank statements and credit card spending summaries. Even simply checking your summer spending against the rest of the year's spending will help you know how much more you should plan for your summer budget.
2. List out this year’s plans and the related expenses.
List out what plans you have already made for the summer. Be sure to include trips or vacations you’ve committed to but haven’t paid for yet. This is also a great time to research discretionary trip expenses. Consider expenses such as the following:
- How much will taxis to/from the airport cost?
- What will any guided tours cost?
- What resort fees will you incur?
- Are there any visa fees if you’re traveling internationally?
All of these are things people often overlook when planning their summertime travel, but they can quickly add up.
3. See what you can fund without spending additional money.
Compare your existing summer plans with how much money you have available to spend. What is the difference? What alternate funding resources can you use to fill any gap (besides dipping into savings or incurring credit card debt)? Some resources include the following:
- Credit card points: Many credit cards have sign-on bonuses of tens of thousands of points that can be used for travel expenses such as airfare or hotel rooms. Many people overanalyze how best to leverage credit cards or maximize points. I believe intentionally selecting one card and consistently using it is the best way to maximize benefits and minimize the negative effects of juggling multiple cards. Make sure you always pay your bill on time to build your credit score.
- Employer programs: Many large corporations include employee discounts for expenses such as rental cars and airfare. This was a benefit I used quite a bit when I was an employee. I recommend price-shopping any bookings you need to make to reduce your out-of-pocket expenses.
4. Create a travel fund.
Using a bucket system with savings accounts dedicated to specific budget goals can be an excellent way to ensure that you hit those goals! Once you've estimated how much you will spend this summer on travel, trips, concerts, summer camp and more, transfer money every month into an earmarked savings account to cover these expenses.
At the very least, your summertime savings fund should be in a separate budget bucket from your emergency fund to ensure that you don’t use your emergency fund for discretionary expenses.
When setting up this system, keep your expense timeline in mind. If your summer camp payment is due on July 15, you can figure out the total amount due, divide it by how many months you have left until the payment and plan on monthly deposits to the related account. I recommend setting up automatic transfers to make sure you don’t forget to put the money aside and accidentally spend it on another expense.
5. Set yourself up for success in 2025.
Remember that planning expenses, savings and investments in advance is one of the most crucial skills for financial success. Commit to planning what your 2025 annual priorities, trips and anticipated travel costs will be. Start putting money away now in your dedicated “summertime fun bucket” so you can spend freely and without worry next year!
A CFP® professional can help you build a budget that works for you and keep you on track for your financial goals. Find your CFP® professional today.
Get started on securing your financial future today
Find a CFP® professional