The school year is coming to a close, which means you probably have big summer plans – the beach, a camping trip, maybe a fourth of July picnic. Plus, your kids have a lot of free time on their hands.
The way I see it, summer plans + kids with free time = LOTS of money.
No matter what your summer plans are, you should have a financial plan to go along with it. Don’t wait until the last minute and rely on debt, and don’t wake up with a summer “hangover” in August after you’ve piled up expenses on your credit cards.
With summer here, half of the year is almost over. So take a step back and think about everything else you need or want to do this year. Then, simply prioritize what’s most important to you.
Make a Plan
You need to start with a budget. That’s your plan. That’s how you tell your money where to go before the summer expenses begin, instead of waiting until September to assess the damage.
Put the summer vacation, kids’ camps, and all your other summer-related expenses into your budget along with all your normal expenses. Use a spreadsheet, a pencil and paper, or an online tool like EveryDollar, and include all your expenses. Your income minus your outgo should equal zero – that’s called a zero-based budget.
The budget will also tell you how much money you have to work with, and whether or not it makes sense to take that weeklong vacation. If you’re in debt, you should worry about paying off that debt before jumping into a beach trip. It’s all about priorities!
Dump Debit
Speaking of debt, make sure you’re actually paying for all this summer fun, not just putting it all on a credit card. Vacations are a luxury, not a right. There’s nothing wrong with taking a few years off while you pay off debt and save for the future (and a vacation).
The best way to dump debt is to use the debt snowball. Pay the minimum on all your debts except the smallest, and pay as much extra as you can on it. Once you have the smallest debt paid off, then move on to the next smallest. Continue until you’re completely out of debt.
Here’s the cool thing: The more debt you pay off, the more money you have to spend! That means next year’s vacation could be paid for if you really get serious about knocking out those credit cards, old student loans and silly car payments. Have an amazing, unforgettable summer but do so without debt and without letting those vacations follow you home.
So, before the summer begins, start by making a monthly budget and paying off any outstanding debt that’s getting in the way. You’ll have a much better summer when you don’t have to deal with financial stress.
Rachel Cruze is a seasoned communicator and presenter, helping Americans learn the proper ways to handle money and stay out of debt. Her new book Smart Money Smart Kids, co-authored with her dad Dave Ramsey, debuted at #1 on the New York Times best seller list. rachelcruze.com.
