Summer is a time for family fun and outdoor activities, but also one of increased spending. According to consumer credit reporting agency Experian, consumers surveyed spent an average of $2,275 per person on vacations in 2016, with $1,308 of that amount on credit card spending. Fortunately, there’s a way to maximize summer fun while minimizing stress on your wallet. Read on to learn four common summer spending mistakes and how to avoid them.
Mistake #1: Thinking You Have to Spend to Have Fun. It’s hard not to have FOMO (Fear of Missing Out) when you see commercials for cruises or hear your co-working talk about her weekend at the beach. But don’t let envy get the best of you; it’s possible – even preferable – to have summer fun without breaking the bank. Don’t have the money for a big trip to Europe? Try a staycation! You might be pleasantly surprised at the local attractions you’ve missed out on while looking at destinations further away, let alone the reduced stress from not having to pack or plan complex travel details.
Mistake #2: Letting a Dream Vacation Put You into Debt. Whether it’s a National Park, a Caribbean cruise, or a week at the beach, vacations can quickly add up to lingering debt. But that doesn’t have to happen. If you plan ahead, there are a number of smart moves you can make to keep travel costs manageable. My husband and I are about to embark on a trip to Colorado with our extended family. We’re planning this trip for quite some time so we opened a rewards credit card and started collecting points. With the rewards credit card, we were able to get our round-trip airfare and our rental car for FREE! Of course, we were diligent and also paid down the debt each month so that it didn’t start adding up. Now that’s vacation savings before it’s even started.
Mistake #3: Splurging on Summer Fashion. No one knows this better than me. When those swimwear sales start popping up, you want to bury your flannel shirts in the backyard and immediately give your wardrobe a fresh summer update. The best time to buy summer clothes is not before summer but after when stores need to get rid of existing stock to make room for their fall and winter-wear. In fact, you can typically save 30 to 50 percent on everything from t-shirts to beach umbrellas just by waiting to make purchases two months into the season; for summer, this means August. So, plan ahead and stock up for next summer early to avoid impulse purchases when the weather warms up.
Mistake #4: Ignoring the Big Picture. While we often acknowledge colder months as a time to review our finances and begin planning for a new year, summer is a great time to check-in on those New Year’s resolutions (or make new ones!) to make sure you’re still on track to meet your goals. Take some time this summer to reassess your financial picture. Do you really need your cell phone package – are you really using that unlimited data? Maybe you can freeze your gym membership during the warmer months when the weather is right for exercising outside or you’ll be on vacation. By cutting down on unnecessary expenses, you’ll find more room in your summer budget for the things that are truly worth spending your money on.
By prioritizing activities, planning ahead, cutting out unnecessary spending, and being creative with your entertainment choices, you can enjoy those longer days without worrying about a cloud of debt following you into the fall.
Until next time,