Summer means big annual holidays, trips out with the family and general fun. A time to relax and unwind from the pressure of the rest of the year.
It also means big expenses. Travel, new clothes, daytrips and long evenings out. Weddings, stag and hen dos, trips to see friends and family. Christmas excluded; we spend more on average during the summer than we do during the rest of the year.
The cost of living crisis has not only pushed up prices but it’s eroded the value of what spending money we have left over to enjoy. This year, with budgets tight thanks to inflation and rising mortgage payments, we might need to watch the summer spending.
It’s time to create a summer budget plan.
Create a summer spreadsheet
If you are a keen keyboard user, creating a spreadsheet to track the cash might well be second nature. If not, you can find plenty of free apps to help you keep track of your income and expenditure.
Whatever you use, the principle is much the same. Start by setting up your monthly income. Next, list your regular fixed costs – mortgage, car finance, council tax and any loans you have out. You will also have to eat, so try and be realistic about your food shopping costs.
Then add the events that make your summer, again month by month. The fortnight away, the festival you have been looking forward to, the big wedding. You’ll need to add a rough cost for each one.
If you are very lucky, the figures in your income column will cover those in your expenditure column. If you are not, you will need to add a third column – showing where and why you will be running into the red each month.
Dealing with the commitments
Being able to take a clear look at the figures is essential. Once you know exactly what the extra costs will be, you can start to find ways to deal with them.
You can’t actually make them magically go away, but you might be able to see ways to minimise them, and to find other ways to cover your expenditure.
Will you be making any summer savings? Your energy bills may go down when the weather is warm. You won’t need to cover car costs or train tickets for commuting while you are away on holiday. You can take the savings off the monthly expenditure, helping reduce your fun cost overrun.
Do you have savings you can dip into? Saving is a good habit to develop, but there is nothing wrong with calling on your reserve when its something like a big annual holiday, especially if you were saving with the express idea of making the most of your fortnight in the sun. Think of it as a loan to yourself and work out how and when you are going to pay it back.
Do you need to use a credit card? They are a costly way to borrow, but they can be an effective short-term solution if you need to spread the cost of a big item over a month or two.
Can you pay back the costs?
Having to cut the costs of summer sounds miserable, but it need not cut your fun at all. Take a picnic instead of having a meal out on those day trips. Shop around for two-for-one and family deals at attractions. Book ahead for train tickets if you are planning to head off somewhere. And make sure you get the very best exchange rate if you are changing money to go abroad.
Having your spreadsheet or similar with the demands on money all planned out will show you exactly how these savings will work to boost your summer budget.
Cutting costs all year round
Of course, you might still find that budgeting is a problem at the moment. Many people are feeling the pinch as the cost of living rockets and mortgages head up with it.
At Continuum we may be able to help find better ways to manage the big regular costs – helping you cut the cost of buying your home with a remortgage, for example. As your summer budget will show you, finding ways to reduce your fixed costs will make all your money easier to manage – and might leave you something over for summer fun.
For help with your financial challenges, call us at Continuum.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice you should seek independent financial advice before embarking on any course of action.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.