Do you remember the excitement of getting out of school for the summer vacations? At a young age it can be magical, with the summer months seemingly lasting years. As a parent, I have realized that summer break for many families also means family budgets and credit card balances being released from control as well. Here are some budgeting ideas that can help soften the blow for those summer trips when it comes to the stress on your family budget.
Let me begin by sharing with you something that my wife taught me. Yes, I am admitting that she was actually right about something so hopefully she does not read this. Early on, I found it hard to step away from my career. For some reason or another I thought I was so important that my world would fall apart. My wife Evan made me realize that it is not only important for my family, it also was important for my career to take scheduled time away from work to rest. I always come back more driven and focused. I now know that summer vacations are important. They are very important. If you have a family, your children are your legacy. You need to spend time dedicated to making family memories, growing those bonds and having new experiences. That creates a more balanced lifestyle and in turn a better career for yourself.
Plan your vacations well ahead of time. The spontaneity I had in my early working years to throw a swimsuit and a pair of shorts in the car and drive to the beach is fun. For those of you who are in a committed relationship, managing careers or even juggling children, you have compromised away the spontaneity with the complexities of life. Be sure you don’t skip planning time away. By planning for your trip well in advance, it allows you to schedule any rentals or travel further out and gives you more time to find the best fit for when and where you want to vacation. It also allows you plenty of time to go ahead and request time off at work which can be super helpful as well. A great time of year to schedule summer vacations is just after Christmas. I know you may not want to discuss doing anything else that costs money right after the expensive holiday season. Maybe that feeling will help you budget your holiday a little tighter in the first place. Another reason this time of year is helpful is that it is usually 6 plus months prior to departure when many people get annual bonuses or plan to use their returns from tax season. Both of these potential windfalls to your monthly household budget could happen during the planning time if you begin just after the New Year.
Over budgeting is a great strategy for summer vacations. Yes, I am telling you to trick yourself. My wife and I create our annual budget between Christmas and the first week of the New Year every year. A line item is always a budget for vacations. One thing I use with vacations is a strategy that I also recommend to clients who are doing home remodeling or renovations. I tell them to budget at least 20% higher than they anticipate the costs. This strategy applies well to summer vacation planning the same way it does to a remodel. The other reason it is so great to over budget is because many times vacations are harder to forecast than your regular monthly budget. Travelling tends to include surprises and many of them can be pricey. If you have over budgeted successfully, these surprises will not overwhelm you and add stress of really breaking the budget. The underlying goal is to lower the stress and allow you to focus on the vacation instead of the expenses. Over budgeting requires me to take vacations that are within my family budget instead of taking a vacation that may be a stretch for us to afford. The strategy allows me to not have to budget while I am on vacation. I am focused on family and having fun.
Include the whole family. If you do not speak with your significant other or children about money, give it up already. Have open and honest conversations and discuss the budgeting. It is not fair to yourself to carry all of the financial responsibility, it is not fair for your significant other to be in the dark and it is not fair for your kids to not have the opportunity to learn financial lessons straight from you. Did I just rant? Anyway, you get my point. Give your children a small stipend to get a souvenir or to entertain themselves. Are there certain experiences that your family does every year on vacation? You could begin including a budget for it so it is not a surprise this time. My wife and I will discuss some of the activities we would like to do and where we plan to go. We discuss an overall budget and some things we are planning to avoid as well.
School is out. Take some time to enjoy the summer and your family. Hopefully some of these simple budgeting tips can help you focus a little more on what is truly important and fun and a little less about how you are going to pay for it.
Matt Logan Inc. is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FINRA, SIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and Matt Logan Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction. These are the views of Matt Logan Inc, and not necessarily those of Summit Brokerage Services, Inc. and any of its affiliates and should not be construed as investment advice.