During the summer months, many people travel, take vacations, and have new experiences that they will remember for a lifetime. While having fun with friends and family, financial management often takes a backseat to having the most fun possible in the amount of time available. Actually calculating how much was spent during these adventures can come as a shock once the person has returned home and financial management returns to the forefront of their mind. Here are some smart budgeting tips that will allow you to have your summer fun in the sun without breaking the bank.
Make A Budget For Those Summer Adventures
One of the most important budgeting tips for the summer months is to actually create a budget for the summer months. Just like you use a budget to manage your monthly expenses and control your spending, you can use a budget for your summer spending too. Review your finances and calculate what you can realistically afford to spend on summer fun. Once you have a budget established, you can plan your trips and search for deals that will save you money on your summer adventures.
Limit Your Additional Expenses
There are many ways to have fun during the summer without incurring a lot of additional expenses. Many expensive trip ideas have less expensive counterparts that can save you a great deal of money that can be used for other expenses or saved for the future. For example, instead of flying to a beach in an exotic location just to lay on the sand for a few days, consider driving to a beach that is nearer to your home and spending your vacation there. It will be the same sun and similar sand for less than half the price you would have paid to travel farther away. You can also limit your expenses by choosing free activities over paid ones, dining at places that offer coupons or discounts, and choosing lodging that is off the beaten path.
Use Cash Instead Of Credit
Another good budgeting tip for the summer is to commit to using cash for your purchases instead of putting everything on a credit card. Studies have shown that people tend to spend less when paying with cash because they experience a physical separation from their money that is not felt when spending with a credit card. Spending cash will also keep you within your budget because once the money is gone, you know that you have reached your spending limit for that occasion. This will prevent a debt hangover once the vacation is done and you go back to your normal routine.
After reaching a settlement with 31 state attorneys general, the three major credit reporting agencies – Equifax, Experian and TransUnion – have agreed to make changes to the way information is added, reviewed and removed from consumers’ credit reports. Over the years, millions of reports have been made to government agencies by concerned consumers worried about errors on their credit reports and reporting difficulties at getting credit report errors corrected in a timely manner. Because credit reports are so widely used in today’s society, errors on credit reports could result in the person being denied credit, a loan, insurance, housing, or a job.
As a result of the settlement, credit reporting agencies will now implement an escalated process for handling complicated disputes, such as those involving identity theft, fraud or mixed files. They will also use a more detailed system to share data and provide consumers with one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made as a result of the dispute. A link to its online dispute website will be added on the website AnnualCreditReport.com, along with information informing consumers how they can further dispute the outcome of an investigation.
As part of the settlement, the credit reporting agencies will also pay $6 million in fines and restitution. The settlement also places limitation on credit reporting agencies’ direct-to-consumer marketing and prohibits the addition of certain information, including fines, tickets and certain medical debts, to a person’s credit file. The credit reporting agencies have also agreed to maintain a database of issues with groups that furnish data on consumers and provide a list of those entities to the states upon request.
All of this is good news for consumers, who have struggled for years to get the credit reporting agencies to acknowledge the financial damage caused by credit report errors and to get errors removed from their credit files. It is estimated that nearly a quarter of consumers with credit histories have errors on their credit reports, many of them serious enough to drop the consumer’s credit score by a considerable amount. The new settlement ensures that the credit reporting agencies will be more responsive when consumers call to correct their mistakes and will expedite the process of removing incorrect information from the credit reports.
Consumers can receive free copies of their credit reports from the three main credit reporting agencies at www.annualcreditreport.com. Federal law mandates that these agencies provide each consumer with one free credit report upon request in a 12-month period.
Graduation season is a time of celebration for many families. College graduates are celebrating the completion of many years of education and their families are celebrating the symbolic beginning of their children’s adult lives. After graduation, new college graduates are faced with a lot of new challenges, including managing their money effectively to become financially independent. Because many high schools and colleges do not require students to take financial education classes to graduate, many college graduates graduate with little knowledge of financial management. Here are some good money management tips for new college graduates that will get you on the right path to financial independence.
One of the most important money management tips for new college graduates is to start budgeting as soon as you are in charge of your own finances. Establishing a monthly budget is essential for long-term financial health because it helps you see how much money is coming in and how much you are spending for different expenses. There are many personal finance apps that can help you with this aspect of money management, including the budgeting app Mint. These apps monitor your bank account and credit card balances, track your spending, and categorize your transactions into budget categories automatically.
Limit Your Expenses
Many new college graduates get into financial trouble because they let their expenses grow uncontrollably until they are living paycheck to paycheck to make ends meet. While there will always be new things to spend your money on, limiting your expenses so that you still have money left over for saving will put you in a much better financial position for the future. Having savings available will help you handle unexpected financial emergencies without having to worry about using expensive credit, obtaining personal loans, or borrowing money from friends and family.
Have A Plan For Paying Off Student Loans
According to a recent study conducted by Edvisors, more than 70 percent of bachelor’s degree recipients will graduate with student loans, and the average 2015 graduate will have more than $35,000 of student loan debt. Having a plan in place to pay off these student loans as quickly as possible will help you eliminate this debt and have more of your income available for saving and other needs. While it may be tempting to limit the amount you pay on your student loans to have more money immediately available for more desirable purchases, the sooner you pay off the loans, the less interest you will pay in additional costs for the loans, potentially saving yourself thousands of dollars.
At 29, I would consider myself to be a full-on grown up person. And one of my big takeaways from full-fledged adulthood is that in order to get your finances right, you’ve got to change a lot of habits. Waste is the most natural thing for people like you and me to do. Frugality comes naturally to some (or so I here), but most of us are not this way. And that’s a shame, because the average adult financial life is packed with waste and missed savings opportunities. But for the average person, it simply doesn’t feel this way. You look at your finances and think, “I work hard, I don’t have any extra time, I’m not running up huge restaurant and bar tabs every night, I don’t live anywhere fancy. Why don’t I have any extra money?”
It’s because money slips between the cracks. When we get busy and stressed out, the details of our lives start to follow the paths of least resistance. That’s why it’s hard to keep up an exercise regimen when you’re stressed. It’s hard to keep in touch with your friends and family if you’re working all the time. Following a budget is the same way. If you’re running in the red, you are going to start spending outside the bounds of your budget, every single time.
This begs the question, “What are we working so hard for?” In many cases I have found that we have to work ourselves to death to fund our inefficient lifestyles. It’s like driving a 2005 Hummer. You’ll have to get a second mortgage to the payments you’re making at the pump. But this all begs the question, “Why not sell the Hummer and buy a car that doesn’t guzzle gas?”
Our lifestyles are a lot like this. If you have huge food costs, rent or mortgage payments that take up a third or more of your income, credit card debts, and a dozen other expenses that are dragging you down, you’ve either got to dramatically increase your earning potential or start cutting some of these expenses. This is where the miracle of frugality comes in. Many people can actually save more, while working less, simply by changing the way they live.
Start with the big stuff. Can’t afford your car? Sell it. Can’t afford to live where you do? Move. Those are the biggest and the most potentially painful changes you’ll have to make. From there it gets easier. Cancel entertainment subscriptions your can’t afford or don’t use. Use your extra income from the above savings to get rid of expensive debt. Start cooking at home rather than paying 3-4X as much for restaurant foods. Make any of a dozen different changes, if only for a month to see what a difference it makes.
At the end of the month, take a deep breath. Do you feel the change in your anxiety and restfulness? That’s because living beneath your means is easy. It’s not a constant grind. It allows you time to focus on stuff that matters: your family, your health, your other interests. It’ll also enable you to save and invest to a degree never before possible. Open an IRA, buy your house if you can, start doing some CFD Trading.
In the end, you’ll be happier and healthier, not to mention richer, than you were when you were working yourself to death for an unsustainable lifestyle. Living beneath your means is nice. It might take you a year or two to really figure out how to do it best, but believe me, it’s worth it.