It's summer - time to relax and enjoy the outdoors, time to be laid back and have some fun, a season filled with activities - ball games, theme parks, fairs, and maybe even a vacation; and time when we don't feel like cooking (it would heat up the house; and besides, we just want to be outside.)
Does this sound like a recipe for financial disaster? It can be.
I'm not here to spoil your summer fun, really. But I do want to encourage you to avoid creating regrets that will haunt you throughout the fall. How can you have your fun and still avoid regrets?
The answer lies in setting limits. Plan your summer finances with the same enthusiasm you use when planning your summer activities. Here's how:
1. Each month, plan for paying your bills and meeting your basic needs (food, gas, medical, saving for emergencies, etc).
2. Add up those core expenses and compare them to your expected income for the month. How much is left for discretionary use?
3. List the month's activities: think ahead, look at the calendar, and include family members so you don't miss anything. Also list any special expenses you'll expect for example, in August you may need to allow funds for back-to-school supplies or clothing.
4. Divide your discretionary money (No. 2) among the items listed in No. 3. It is wise to include family members in this discussion also, because: A) they may have ideas about costs and savings; and B) if they help make the plan, they are more likely to help follow the plan. They may even be willing to give up ordering pizza in order to have more money available at the fair. Step 4 gives you your plan and your financial limits for the month's activities.
5. Follow your plan. Have a strategy to prevent overspending on each activity. One effective strategy is to take only cash (no plastic, no checkbook) to a ball game or to the fair or the zoo. Then you simply cannot spend more than you planned.
If your plan seems a little restrictive, don't lose heart. No one can have everything they want, and by planning ahead, you give yourself time to look for creative ways to save money (packing picnic lunch, bringing water bottles). Setting limits in advance also helps you make sure that you prioritize your expenses. When you know you only have so much money to spend at the fair, you'll make sure you spend it on the rides or foods or events that are most important to you, rather than wasting it on something you don't even care that much about. Above all, keep the focus on the things you will do, rather than dwelling on things you choose not to purchase.
Find more information about personal finance at www.extension.iastate.edu/finances, or www.extension.org. Contact me through your local office of ISU Extension (Webster County: (515) 576-2119) or directly (832-9597 or firstname.lastname@example.org).