Managing Your Finances: Summer Living Expenses

Spring cleaning? Check. Renewing your gym membership? Double check. Personal finance evaluation? Silence, huh?

Don’t worry, you’re one of many Americans who might not realize the importance of fiscal house cleaning. It’s  far from a conscious decision, but the truth is we do tend to slow down on our spending during colder months. Without the motivation of sunshine and good times to spur going out and socializing, it becomes a little easier to save our coins. Now that we’re re-entering a period of warm weather there’s no better time to evaluate your spending habits, and put some parameters in place to assure you make it through the summer with your wallet and savings account intact.

Here are a few of the things you should be looking into:

Credit

Checking your credit regularly will go a long way in helping you to stay abreast of your spending, especially since credit issues can start small. Maybe you used your department store card to splurge during a sale, and then you used another credit card for a night out with friends, and then you bought…Well, you catch the drift. It might not seem like a big deal, but when you want something, and you have access to cash you don’t quite have yet it becomes easy to lose track of exactly how much you’ve spent. These balances can add up quicker than you’d think, and you can end up putting yourself in a hole you’ll be digging out of for quite some time. Checking your credit regularly also helps to preemptively spot fraud and quickly rectify life-changing issues like identity theft.

Emergency Savings

Do you have a savings account specifically for emergencies? If not, you should. Most accountants and money managers will say that your emergency reserve should be able to sustain your living expenses for three to six months. Of course this will vary depending on your career, family situation, and a number of other factors. The most important part is just to have an emergency fund, and to practice enough self-control not to dip into it for faux emergencies like sample sales.

Spending and Budget

Ahead of the start of summer you’ll also want to review your current spending patterns. The best way to do this is by making a monthly budget and sticking to it. Track how many times a month you eat out, how often you purchase non-necessities, the typical cost for groceries, your rent and other living expenses, etc. You can review these records at the start of each month or at the start of a new season. It’s also important to think ahead when you’re reviewing your current budget. For instance, if summer is a time you normally travel extensively you’ll want to add those additional costs to your budget. You should also pre-budget for minor hikes in living expenses like higher energy bills due to air conditioning usage, and other such things. If you have a history of poor financial self-control the beginning of the season is the best time to implement a regimented budget that forces you to save money.

Income Taxes

Tax season is over and we all danced with joy when we received our checks. A little extra money is great, and there’s nothing wrong with giving yourself a little treat, however it’s important to put outside some of these funds for your future. Additionally, you should review just how much you’re getting back. If you’re receiving an exorbitant amount of money from your refund it’s an indication you may be withholding too much of your paycheck. If so, those funds should be directed towards your savings and paying off any outstanding debts.

Healthcare

We’re now living in a time where our health is a high financial burden. Some insurance plans have premiums that go beyond $500/month. Worse yet –  you’re not even going to the doctor or dentist monthly. With a plan like Dentalsave, for example, you’re spending the same amount of money per month than you do for your monthly subscription services for movies and music. Here’s the best part: vision, prescriptions, hearing and dental are all included! This alternative plan lets you cover your health with a smile on your face.

As you look through these things try to remember the importance of financial stability. No matter what point in life you find yourself in: single, married, divorced, starting a family etc., it’s important to know that you and those you love will be ok should a worst case scenario occur.