by Alexander J. Boughton
Summer will soon be here! It’s a great time to entertain outside with friends and family and some good seafood, steaks and cold brews. It’s a wonderful time to get away from everyday routines by escaping to a fun European city. For Millennials, like me, who are just starting to save money for their first home, it’s not easy to say no to an exotic island retreat or an unrestrained party with local friends.
So here’s the question: how do you balance all the priorities of spending this summer with what you have available in your checkbook? That question has many answers, so let’s review the best ways to curb unnecessary spending while still enjoying more time in the great outdoors.
Be honest with yourself about “wants” vs “needs” by creating and adhering to a realistic budget on a spreadsheet. Don’t bite into savings to redecorate your home for the season. Purchase timeless pieces that are appropriate for all seasons, including summertime. Find inspiration from the yellow sun, blue sky and green grass. Consider bright, yellow pillows for a sofa and colorful, potted flowers for a table. Contemplate if it is really necessary to go to Europe at this moment in your life. What’s wrong with a local beach vacation instead? As for a lavish summer party over Memorial Day, you can still have fun with friends eating hot dogs and burgers instead of lobsters and oysters.
Practice discipline! Don’t buy impulsively. Avoid binge spending. Think twice before paying big bucks for a whole new set of vacation clothes. Buy just a few new fashion pieces to enhance your current wardrobe. Limit the quality and quantity of summer events at your home. Just because you happen to have the biggest backyard amongst your friends, doesn’t mean it’s the only place to host a large party. Consider gathering at a park, by a lake or at the beach.
Try to use cash whenever possible. This helps you track bad spending habits more quickly. Many have gotten into the practice of using credit cards and digital wallets, which can contribute to overspending because you don’t realize how much you have charged until the statement comes in. Much like when you go to a casino and gamble with chips, which are easier to bet with than real money, the same concept applies when it comes to credit. When I do use my credit card, I appreciate how it allows me to track my biggest currency drainer – food and eating out. Having observed my own hurried buying habits at the local markets, I now take the extra time to wholesale shop.
Try saving money. Don’t go on a vacation until you can pay for it. Open a savings account and start dropping money into it every pay check. Some companies offer direct deposit, which really simplifies one’s ability to save. If contributing to a 401K, why not increase the contribution percentage after a decent raise. You can still take home additional money and save more at the same time.
Having great summer experiences doesn’t mean we have to drain our earnings, if we practice how to spend money more wisely. It takes time, but once good spending habits take hold, you will gain greater satisfaction and discover how sound financial decisions made today can bring about a better future, perhaps filled with more vacations, parties and even a new home!