The summer months are a pivotal time for making smart financial decisions. There are unfortunately several opportunities to make poor choices that can leave you scrambling for the rest of the year. The key is recognizing how easily your budget can get off track.
What is the most common type of summer financial mistake?
Mostly it is taking unplanned mini-vacations and splurging on summer entertainment. All of those 2 day trips and must see concerts can really add up. And rarely has any planned for spending more during the summer.
Do kids impact the summer budget?
Yes, the older your kids the more likely your summer spending is going to increase. Usually this happens until they begin to work. The main culprit is eating out more and doing more expensive summer activities. Another impact is from getting ready for the back to school which usually hits during late July and early August.
What else tends to be big budget buster for the summer?
Making a spur of the moment outdoor home improvement decision, like adding a deck or patio and financing with credit cards instead of using a lower cost loan option like a home equity loan.
Are there other ways that home improvement projects can become a financial strain?
Yes, if you are adding a new deck or patio, we typically don’t factor in new furniture or other outdoor structures that go with the new deck. Easily a $5,000 deck can balloon to a $10,000 project and that significantly changes your budget.
Are there any long term financial mistakes that people make in the summer?
One of the biggest is using the buy now don’t start paying for 12 months with no interest to finance purchases. One can get caught up in the euphoria of buying and then have regrets in 12 months because they didn’t really plan on how they were going to pay off the debt they have accumulated.
Is it always a bad idea to use this type of financing?
No, if you are disciplined and start saving to pay-off the debt before the interest charge is added, these deals can be very smart ways to finance purchases. The key is making sure to not overextend and planning when you make the purchase on how you are going to pay it off before the interest starts accruing.
Are there any strategies to keep from busting your summer budget?
You have several options to help fund these extra summer expenses:
- Start a summer expense savings account (this will be for next year of course)
- Lower other monthly expenses to get more money (maybe eating out or premium tv, etc)
- Ask for others to give you gifts of concert tickets or cash
- If you have children, get them working to help fund some of their expenses
- And of the obvious one, cut out the extra summer expenses
with 0 comments
Categories: Financial, Money Matters, Spending