The end of the year is only a handful of months away, which means now is a great time to get planning. Here are a few ideas to reduce stress when it comes to summer spending.
It’s a trap many of us are familiar with: Summer arrives, with family festivities and holidays, but the associated costs haven’t quite made it into the household budget. Or, money has been put aside, but new events have been added to the calendar and the dollars don’t quite stretch to cover them.
This year, not having an updated festive budget may sting a little bit more, as we’ve all been dealing with inflation and higher interest rates. For that reason, now’s a great time to get thinking about end-of-year activities and coming up with a plan. Here are some tips:
1. Set some summer forecasts
If you’re planning to host a Christmas lunch, buy presents for family and friends and go on a holiday, it may be time to get thinking about how much each activity will set you back – and budgeting for it.
If your celebrations are likely to look like last year’s, one strategy is to check how much you spent in 2022 and add an extra margin for inflation. For example, you may wish to add 10 per cent to your costs from last year to be safe. Alternatively, you could look at each individual activity for this year and assign a prospective dollar amount.
2. Consider allocating money
Once you’ve calculated how much you think you’ll spend, think about putting a set amount into a savings account each week or fortnight, to cover the costs.
Fortunately, savers are being rewarded for putting money in their mutual, bank or credit union at the moment, so savings may attract higher interest.
3. Look for windfalls
If you’ve received a tax refund, a large dividend, a bonus from work or another large payment, consider putting it towards your festive budget. Many of us will be tempted to use any windfalls for immediate cost-of-living relief, but it’s worth thinking about where they are best directed – it’s up to you and what works best for your circumstances.
Again, you may even earn a bit of interest if you put it in a savings account.
4. Think about how costs can be reduced
Given many of us are feeling the pinch, some early planning of how to save money over summer may be useful. Ideas include hitting the shops early to get bargains, giving hand-made gifts, asking guests to bring a plate of food and their choice of drink, and having a summer staycation or shorter holiday over the peak period.
There are plenty of ways to spread the cheer without overspending. Happy planning!
Source: Customer Owned Banking Association (COBA)