Let’s play a game. (Summer, after all, is perfect for games). Fill in the blank:
I’m willing to bet the word “vacation” popped into your mind. Didn’t it? It’s what I thought of too.
And those warm, highly anticipated months between May and September are favorites for a reason: there are trips, breaks from work, time off from school, long summer evenings spent outdoors, laying by the pool, ice cream….
…I could go on.
But I’m here with a special PSA: while this season is full of vacation from the drudgery of real life, we shouldn’t take a vacation from our finances.
At least not completely. If everything else falls by the wayside this summer, at the very least everyone should accomplish the following three goals.
- Pay for a vacation in cash
Hopefully, you’ve been busy hibernating all winter and stashing your pennies for an annual summer vacation. But if you haven’t been saving, it’s a great goal to pay for a vacation in cash (and there’s still plenty of time!) This way you can avoid the guilt, and be in a better position financially for the inevitable, expensive back-to-school and holiday seasons that swamp summer spenders shortly after Labor Day.
Given that the average American household credit card debt currently sits at $5,331 in 2019, and Millennials in particular are prone to go into $1,000+ of debt for a vacation, it may be a better money move to forgo a trip away altogether. If you do decide to stay in town, you won’t be alone.
Bankrate research finds that nearly 39 million Americans are opting out of vacations this year in order to pay off debt.
- Stay on track with retirement contributions
Don’t let the pricey pursuit of a vacation keep you from contributing to retirement. Research finds Americans consider summer the second most expensive season of the year, but it’s important to not forgo retirement saving in order to have extra money in the budget. You know, if you want to go out of town…or drink a lot of rosé on patios during “Summer Fridays.”
Even during the summer months, it’s important to treat your retirement money as if it doesn’t exist. Don’t factor it into your budget, or say you’ll catch up later. As I mentioned before, paying off debt from summer is incredibly hard – 43% of consumers carry balances for two years or more.
My advice? Just automatically put your retirement funds away and don’t touch it.
This goal should be easy to accomplish; if you’re already contributing to retirement all you have to do is nothing.
- Earn $100 extra each month
Things slow down in the summer, work relaxes, and school lets out. Plus, the days are longer.
All of these factors make summer the perfect time to try out a new side hustle or spend the time finding ways to earn more and save less.
Below are just a handful of gigs to try that are in particular demand during the summer months.
- House sitting
- Dog sitting
- Ride-share driver
- In-home childcare
- Grocery/Food delivery
- Listing unwanted household items online or holding a yard sale
- Checking your monthly expenses to see what you can eliminate or negotiate and save
LendEdu research finds that 28% take on a side hustle to pay for summer vacation costs, but I think this number could be larger. I cannot urge readers enough to try and earn more during the summer. When else will you have this much uninterrupted time to try out a new gig?
Let’s play another game. Can you collect all three goals?
I understand the beauty of summer and know there will be time later on this year for checking your insurance rates, cutting down the budget, or really getting aggressive with your debt. That’s why I’ve boiled down these goals for summer to the most essential – not going into more debt, staying on track with retirement, and finding a new way (or two) to earn some extra cash.
If you can cover these bases, you’ll be in good financial shape long after your summer tan fades.