Summer Budgets – An Oxymoron?

For most individuals, summer represents a time of the year for many fun things: vacations, outdoor activities, and additional time with family and friends. These types of activities and relationships are a major component of what makes summer a season of enjoyment. As consumers, these types of activities and relationships sometimes put a wrench into spending habits and budgets. 

Like most choices in life, summer spending is a delicate act of balance. This spending is about finding the give-and-take strategy, making a happy medium of fun, and creating memories with financial prudence. Below are some subtle recommendations for finding a way to enjoy all that summer has to offer in a financially responsible way.

One perspective to grasp is that summer never arrives unexpectedly—it happens every year! Because of this, we can plan and use time on our side to proactively develop some ideas that work specifically for us. One idea might be setting aside a specific amount for summer activities and trips each month of the year, not just during the summer. Another idea might be prioritizing your spending by listing the most important events or purchases for the upcoming summer and then picking and choosing within the budget established.

Another recommendation is to find where to be cost-effective and where to spend on more expensive activities or experiences. Everybody has limited means, so the goal of maximizing those means is to understand the tradeoffs.  There is nothing wrong with booking a costly summer vacation. It is essential to understand that to “take” advantage of that trip, a family may have to “give” up other summer activities to make that trip a reality within their budget. People get into financial trouble when they do not grasp (or choose to ignore) these tradeoffs and end up trying to do it all.

Ultimately, these summer experiences, whether a trip or a particular purchase, are intended to bring us happiness. While that regularly ends up being the case, looking at the relationship between the cost spent for that happiness is helpful. In economics, we call this “utility.” Each person, couple, or family will define utility for themselves – the goal is simply to be mindful and aware of how much happiness comes from your spending. This can be especially helpful as you seek to enjoy a fun-filled summer without breaking the bank.