School is coming to an end, the days are getting longer, and as the weather gets hotter, you find your bank account starting to decrease. It’s easily understandable why summer can be so expensive, with weddings, trips to the beach or the amusement park, a family vacation, and the increasingly frequent happy hour hang outs, summer gets expensive, quickly.
Don’t let summer spending worry you though, because with these 3 tips and a visit to your fiduciary advisor, summer will go smoothly, and your finances will remain intact and on track.
Automate Your Life
There’s an app for that. One of the best new tools for saving, and keeping your finances in check are the apps that automate your daily moves. There are some that let you “set it and forget it,” and some round up your spending to the nearest dollar and then invest the remainder. Others will help you calculate just the right amount of money to save daily based on your income and spending habits.
Some banks also offer a “ keep the change” type of program which also round up your purchases and make saving about as mindless as spending can seem.
If you’re like me, and prefer a little more control over the amount of money being funneled into your savings each month, you can set up a structured, transparent plan with your financial planner, or check out an app like Qapital. You can set up a program, or use an app that functions based on a rule you create. Whatever money is deposited, a certain percentage of that is moved to a different account. You can adjust it, change it anytime, and monitor the transactions, but they are done automatically.
Lastly, by automating your bills with bill pay programs, you won’t ever miss a payment. That means, no late fees, no worry, no accumulation of more debt (than you already have planned for). For a lot of companies, automatic pay will also get you a small discount on your total bill as well.
Follow The 50-30-20 Rule
If you spend all of your money, you won’t be able to save it. That’s something we can all agree on and it’s something that none of us want to be doing. By following the 50-30-20 rule, budgeting will come easier. 50 percent of your paycheck should go to living expenses, 30 percent then goes into your savings, and lastly 20 percent goes to things you want. Obviously, there’s great flexibility with this rule, but that’s the beauty of it. You can mold it to work for your lifestyle and financial goal. But if you loosely use this ratio and the idea behind it, your spending and saving will remain in a positive, controlled balance.
The last method for keeping your summer saving on track is a more old school idea. It’s simple and can be effective if you are a “stick to it” kind of person. It’s based on a simple exchange: everytime you make a big a purchase, transfer that same amount of money into your savings. It’s not meant to be used for when you pay your mortgage (but good for you if you do it), but more to reduce extraneous spending. If you match your big purchases, you’ll pad your savings nicely, plus you’ll be very conscious the next time you want to buy expensive shoes, or a new bag, or go out for a fancy dinner and night out with friends. Sometimes you need those things, but sometimes you don’t. When you don’t need them, and still want them, put the equivalent amount of money you’ve spent into your savings, and this summer will be the most successful one yet.
The last step is to keep a good eye on your spending. Whether it’s through statements or paperless on an app, take a good look at your weekly or monthly bills and scrutinize your spending. Do you really use that subscription service? Are you in a position to re-negotiate your cable bill, internet provider, or adjust how you consume content in general and really save some dough? Be mindful of where your money goes and spend it with purpose. Stay vigilant on important expenditures, and automate when you can, and once autumn arrives, your savings will be in even better shape than before.