July 24, 2024
4 Unnecessary Seasonal Expenses To Slash From Your Summer Budget

You’re probably familiar with “spring cleaning” for your living space, but have you ever tried “summer cleaning” for your budget? 

The fast-approaching summer months are a natural time to reflect on your spending habits and slash unneeded ones, experts say. Among the reasons: You’ve now had a few months with any subscriptions or other recurring expenses you took on at the holidays or the new year, and a better idea of their usefulness.

“I think summer is a good time to cut down on those expenses,” said Cassandra Rupp, a Texas-based certified financial planner (CFP) and senior wealth advisor with Vanguard. “Anything that is recurring.”

There are also several items associated with summer that — if they’re among your expenditures — are likely begging for the heave-ho. Examples include avoidable travel fees during those summer vacations, along with frequent dining out, which spikes in summertime.

These cuts don’t need to translate into deprivation, said Wendolyn Forbes, a CFP with Wealth Transition Finance — a member of Advisory Services Network, LLC. She counsels that it’s more about identifying those unnecessary to useless items and making smart decisions about what brings you joy.

“You want to achieve your financial goals and also enjoy your money,” Forbes said. “It’s important to have a reward for the positive balance you’re committing to.”

For those hoping to save some extra money this summer, just sticking to a budget is a popular tactic. In a recent GOBankingRates survey, 58% of respondents listed doing so as part of their money-saving strategy this summer. That was the most popular choice, beating out other options such as shopping at sales (42%), planning ahead for when to travel (31%) or working a side hustle (24%). 

Of course, you can’t dive into summer cleaning for your budget if you don’t have a budget. Rupp lists this a common pitfall — no matter what time of year it is. 

“Some investors and clients come to me without a budget in place,” Rupp said. “Once you get it down on paper, it’s a lot easier to see the areas you want to address.” 

Here are four areas worth looking into.

Subscriptions and Memberships You Got for the Holidays or New Year

If you’re using that gym membership you got as part of a New Year’s resolution, great. Keep it up. If you’re rarely or never going, though, it may be time to suspend or cut that expense.

There’s also a potential upside around enjoying the nicer weather, Forbes said.

“Some summer-specific items people might consider slashing may include subscriptions to services that keep them indoors,” Forbes said. “Consider suspending such services and spending more time outdoors. Getting outdoors and being active can be light on your budget and healthy for your body.”

Pam Krueger, who founded WealthRamp.com and also co-hosts “MoneyTrack” on PBS, pointed to studies in recent years showing the average consumer spending well more than $200 a month on subscription services like Netflix and Blue Apron. Smaller monthly payments for app services on your phone are easy to sign up for — and then forget about. Services like this are often signed up for around the new year as part of a self-improvement plan, and they’re ripe for review after a few months.

If you sign up for a recurring monthly expense, Krueger recommended doing something to keep it on your radar before either you end up paying for something you may not be using, or the trial period runs out on something you never intended to keep, but you forget to cancel it. Summer is a great time for check-ups but you can do this throughout the year, she said.

“I set reminders for myself in my calendar,” Krueger shared.

Frequent Dining Out 

The summer months are traditionally the busiest for the restaurant industry, as consumers look to enjoy their meals with a side of fresh air and to explore new eating establishments while traveling.

Dining out more than the U.S. average (about twice a week including takeout) can gobble up big chunks of your budget, however. Forbes recommended cutting back, but not cutting out — if you’re able.

“For example, if you dine out every day, how much could you save if you chose to eat at home for one or two days out of the week?” she said. “Then, take the amount of money saved and direct that toward another financial goal like paying down high-interest debt or adding to your emergency savings. Practice this exercise with other categories.”

Excessive or Last-Minute Vacations 

What’s the most frequent casualty of summer budget cutting?

“Unfortunately, it’s vacation,” Rupp said. “Vacations get cut out at this time of year. It’s unfortunately an easy piece you can take away.” 

You can make your vacations more cancel-proof with some advance planning and shopping around for the best deals. Last-minute vacations can be fun, but they can also be extremely expensive.

In addition, as you’re planning, be careful that the cost and frequency of your trips are within your means. Stick to a budget.

Fees You Can Avoid 

Fees from numerous sources — banks in particular — equal clutter that you should try to clear away, Krueger said. She added a personal story about a bank account-related item that she recently realized needed to go.

“I’ve been paying for a safety deposit box at a bank,” Krueger said. “I haven’t seen that safety deposit box since I opened the account. I found the keys — I’m going to take them in and cancel it.”

If you’re flying during a summer trip, consider whether you really need to pay baggage fees. It may be possible to get by with just a carry-on. You could also try bringing your suitcase to the gate, then asking if the flight is low on space and needs volunteers to check bags there. If so, you may be able to avoid a fee and possibly board sooner, depending on the airline.

Krueger also recommended regular checks of your credit card statement to help you catch any pesky expenses you no longer need. It’s not unlike a good spring — or summer — cleaning.

“It takes a minute, but you’ll find something,” Krueger said. “Clear out the clutter.”

More From GOBankingRates



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *