For the last few months, many of you have been getting ready for the summer by working out and changing your diet so you will be ready to be active. This same philosophy needs to apply to your financial situation to be ready for the summer.
Are summer financial problems related to a specific generation?
Unfortunately, from the greatest generation to Gen Y everyone can make poor decisions with their summer spending habits. The impact will be different but in the end, it still can create difficult money issues for anyone. Amazingly it is almost always for the same reason regardless of the generation.
How do most people get in financial trouble in the summer?
Primarily it is because they make several unplanned purchases in a short period of time. The issue is that the overspending happens so fast, people don’t realize the debt they have built until it’s too late. Digging out can be difficult and take a significant amount of time.
What types of expenses are usually the culprit?
Interestingly it is usually those expenses that are under $1,000 that create the most problems. The new grill, patio furniture, going big on landscaping or those two or three short vacation excursions that were spur of the moment and seemingly harmless. Because the expenses are small they tend to come in bunches and the potential financial burden is often missed.
What is the most important money skill to make it through the summer?
Discipline. It is really important to follow the needs versus wants philosophy during the summer. There will be a huge emphasis on sales this holiday weekend and the July 4th holiday weekend. It is really easy to justify an impulse purchase based on how much you are allegedly saving.
What is the best way to avoid summer money problems?
Plan for the summer by building a special summer budget. This might mean reducing other expenses so that you can spend for summer activities or be able to handle any increased debt payments for those larger purchases. If you have a plan for how much you want to spend the entire summer you are less likely to overspend in a really short period of time.