Warm weather brings seasonal activities that many eagerly await, but planning outings this summer can be costly if you don’t plan in advance. In fact, a recent survey found that 58 percent of respondents said that affordability is the primary factor getting in the way of planning a summer vacation.
Although the start of summer is fast approaching, it’s not too late to start building a conscious spending plan. Below are three practical tips to build a conscious spending plan now.
1. Set a realistic budget
First, you’ll need to assess your current budget. A budget is a mindful plan about how you expect to spend your money in a specific period. For example, you might create a monthly budget which is a common approach.
It involves finding your total income, deducting essential expenses, and seeing what’s left over for discretionary spending. Follow these steps to determine your current budget:
Write down your total income. Look at last month’s pay stubs or review last month’s bank account deposits to see your total income. Also include confirmed windfall-type income that you’re expecting; for example, a tax refund or seasonal bonus from work.
Itemize your essential expenses. Go through your bank account’s itemized transactions from the most recent full month. Note your necessary expenditures. For example, rent or mortgage payments, car loan payments, health insurance, child care, transportation, and grocery costs. This spending category must be prioritized, before moving on to summer discretionary spending.
Review expenses from the previous summer. This helps you capture seasonal expenses you had during this period of the year. For instance, if you always enroll your child in summer camp each year, account for this in your itemized budget.
Calculate your remaining discretionary funds. Subtract your monthly essential expenses from your total monthly income. If you have non-negotiable summer expenses, subtract this amount from your total, too. The result is the amount of money that’s left in your spending budget.
With this information on hand, you can plan more intentional and sensible summer activities that don’t compromise your financial obligations. Using a digital budgeting tool, like My Money Manager, can help make this easier. It helps you manage your finances in one app. For example, you can use it to create and track your progress toward a dedicated summer savings goal and notify you when you’re close to your spending limit.
2. Reduce expenses
Let’s say you’ve calculated your budget, but your monthly discretionary funds are not enough to cover upcoming summer plans. You can make room in your spending budget by reducing existing expenses.
Shaving a few non-essential costs today — even for a couple of weeks or for the whole month — can give your summer spending plan some breathing room.
Below are examples of where to look to shave expenses:
Dining out. Cut back on dining at restaurants, fast food, or your daily Starbucks latte. Direct any saved money toward your dedicated summer spending fund.
Unused subscriptions. This spending category is easy to forget about because these subscriptions are often on auto-pay. Pause or cancel a premium gym membership that you haven’t used, or cancel that obscure streaming service that you’ve been meaning to close, but haven’t gotten around to yet.
Retail discounts. Before heading to the register or digital checkout, take a few minutes to clip a coupon or search for a discount code. Whether the code offers a 30% discount or simply free shipping, you could literally save a chunk of savings from your purchase with just a little bit of advanced purchase planning.
Alternative transportation. Driving around for every errand can be costly, especially when gas prices are high. Instead, consider taking public transportation, riding your bike, or walking to your destination, if possible, to save money on fuel.
3. Raise your income
Another way to conscientiously plan for summer is by increasing your income. You might not get a raise from work before summer, but you can increase your income in other ways.
Selling unused items. Sell unwanted items from your home on community-based sales platforms, like Facebook Marketplace or Craigslist. For example, home goods, clothing, and more. These platforms let you coordinate a pickup at a local, public location so there’s no out-of-pocket expense on your end.
Working a side hustle. Temporary side gigs can bolster your income so you have more spending power this summer. For example, sign up as a rideshare driver with Uber or Lyft, or enroll as a delivery driver for Doordash. This option offers a flexible schedule so you can spend your downtime earning extra money.
Selling your freelance skills. If you have a unique or highly sought skill set (e.g. logo design, video editing, or writing, you can earn extra cash. Sites like Fiverr make it easy to advertise your service and find potential clients.
The average person earns $100 to $499 per month by working a side hustle which might cover all or a portion of your summer spending needs. With these tips, starting a conscious spending plan in time for summer is still possible.
For informational/educational purposes only. The information in this content is not advice on legal, tax, investment, accounting, regulatory, technology or other matters. You should always consult your own financial, legal, tax, accounting or similar advisors before making any financial or investment decisions, or entering into any agreement for bank products or services.