Summer is a season many families look forward to — longer days, vacations, outdoor sports, camps, and plenty of memory-making. But with all the fun comes a not-so-fun reality: Summer can be expensive. Between family trips, summer camps, sports leagues, extra childcare for school-aged kids, and spur-of-the-moment activities, costs can quickly add up and wreak havoc on your monthly budget — and even throw off your broader financial plan if you’re not careful.
The good news? With a little planning, you can enjoy a summer full of fun without financial stress. A sinking fund is one of the best tools for managing large, predictable expenses. Think of it as a savings vehicle dedicated to particular expenses and a way to spread those summer costs out over the entire year so you’re not scrambling to pay for everything at once — or worse, going into debt.
Here’s how to set up a sinking fund and make next summer much more financially manageable.
Step 1: Recon — Look Back to Plan Ahead
Start by reviewing what you spent last summer on anything outside your regular monthly spending. This could include summer camps, vacation costs, sports registrations, tutoring, babysitters, a nanny, or any special outings. If you're not sure of exact totals, pull up credit card or bank statements to help jog your memory.
Step 2: Add It Up
Once you’ve got your list, total all your extra summer expenses. This gives you a realistic estimate of what summer costs your family beyond the usual monthly budget — and helps you incorporate those seasonal costs into your overall financial planning process.
Step 3: Divide by 12
Now, take that total and divide it by 12. This is how much you’ll need to set aside each month to cover those expenses next summer without dipping into emergency savings or relying on credit cards.
Step 4: Automate Your Savings
Open a dedicated savings account or create a labeled “bucket” within your current savings earmarked for summer expenses. Set up an automatic transfer each month for the amount you calculated. Automating the process takes the guesswork out of saving and helps you stay consistent.
Step 5: BOOYA! Summer Expenses Are Covered!
When next summer rolls around, you’ll be in great shape. Instead of stressing about how to cover camp registration fees or vacation lodging, you can focus on making the most of the season with your family, knowing that you’ve planned ahead.
What If It’s Too Late for This Summer?
If it’s too late to set up a sinking fund for this summer, don’t worry — you can still take steps now to get ahead for next year. Here’s how to turn this summer into a planning opportunity that fits into your financial road map:
- Track Your Spending
Make a list of all the summer activities you’ve already booked, paid for or have planned for, such as camps, vacations, sports fees or childcare. While you're traveling or attending activities, jot down actual expenses as you go. - Use This Year as Your Guide
Once summer winds down, review your list and total up what you spent. This becomes your personalized summer budget for next year — and can help inform future conversations with your CERTIFIED FINANCIAL PLANNER® professional. - Start Your Sinking Fund Now
Take that total, divide it by the number of months until next summer, and start setting that amount aside each month. Even if you’re getting a late start, every bit you save now helps lighten the load later and helps keep your long-term savings and retirement goals on track.
By treating this summer as your blueprint, you’ll be better prepared and less stressed when the season rolls around again.
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