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Seasonal Spending: Why we Overspend in the Summer
Curb Your Spending This Season with These Helpful Tips
Did you know that the summer season can affect your spending habits? Feeling the sun on your skin, the sand between your toes, and looking up at blue skies are all sure signs of the season, but you may notice a change in your bank account, too. It turns out more than half of all Americans—52%—tend to overspend in the summertime, according to a study from MassMutual. And another survey showed only 28% of respondents bothered to set a summer budget.
Why Does Summer Spending Affect Us?
What’s behind these free-for-all seasonal spending habits? Two-thirds of Americans say it’s a desire to “Make the most of the summer” that causes their spending to skyrocket. Of course, summer activities can cost more, too, and fear of missing out (also known as FOMO) may also contribute to slightly looser purse strings. Though this is likely the case in any year, it’s perhaps particularly so during the last years of the pandemic, when one of the only safe ways to gather has been when enjoying the great outdoors.
If you’d like to be more intentional about your summer spending habits, we can help. Use these tips to guide your spending habits so you can have a fantastic summer without breaking the bank.
Balance Fun and Responsibility
Staying inside all summer to avoid overspending isn’t a sustainable strategy. Of course, neither is spending money left and right on beach getaways and gourmet picnics. If you have children who are out of school in the summer, you’ll likely need a little cash on hand to keep them engaged and cared for.
Luckily, you can have your fun and save up, too—you just need to have a plan. Here’s a reasonable goal: pledge to spend a little bit more in the summer without going overboard. Here are some ways you can enjoy yourself without getting into financial trouble:
- Budget. Planning can help you stay on track during the summer. There are many different ways to budget, each with its own benefits and drawbacks. The important thing is finding something you can stick to, especially when summer temptations are plentiful. The best thing about budgeting is that when you know where your money is going, you give yourself permission to spend what you can. Need a new bathing suit? Want to schedule a long weekend away? If it fits within your financial goals, you can start packing your bag.
- Shop smarter. Many fun summer activities come with price tags. If you can get ahead of your seasonal spending, you can find innovative ways to save. Take outdoor furniture, beach necessities, and pool staples, for example—those are usually marked down as summer slides into fall. If you plan to stock up in advance, you can know you have what you need for a more affordable price.
- Start a summer fund. Throughout the year, you may find yourself saving in small ways. If you skip ordering takeout, stash those funds away. If you happen to make a little extra income one month, put it aside so you can enjoy it when the weather turns. Adding unexpected money to your fund is a great way to make sure you can maximize your summer fun, and it can be a motivating way to develop smarter spending habits, too.
- Focus on the long term. When the smell of barbecue is in the air and the waves beckon you from shore, it can be difficult to say no to overspending. But keeping your eyes on your long-term savings plan can help you keep your head when summer temperatures and temptations rise.
- Practice the pause. Picture this: you’re walking down the street in your favorite vacation spot and something in a store window catches your eye. What you want to do: go inside and buy it straight away. What you should do: keep walking and, if the urge to purchase it is still there a day or two later, check to see if it would fit in your budget. Pressing pause in that scenario can help save you from impulse buying, which rises in the summer months.
FOMO vs. Financial Goals
There’s so much to love about the summertime—the laid-back vibe, the beautiful weather, taking time off, and exploring new places. It’s natural to want to make the most of this time, but don’t let fear of missing out on summer fun dictate your financial wellbeing.
If you feel tempted to spend when you see the summer fun your friends and acquaintances are posting on social media, take a break from your social accounts for a while. If you need reminders to keep your eye on your long-term financial goals, write them out and post them on your fridge or keep them in a note on your phone.
Curbing seasonal spending habits can be tough but spending too much and suffering later can be an even bigger challenge. Keeping your wits about you during the warmer months can be a big benefit to you all year round.
Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.
- Budget. Planning can help you stay on track during the summer. There are many different ways to budget, each with its own benefits and drawbacks. The important thing is finding something you can stick to, especially when summer temptations are plentiful. The best thing about budgeting is that when you know where your money is going, you give yourself permission to spend what you can. Need a new bathing suit? Want to schedule a long weekend away? If it fits within your financial goals, you can start packing your bag.
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Strategies for Building Wealth in Your 50s
Now is The Time to Strengthen Your Finances and Finalize Your Retirement Plans
While it’s true that it’s better to begin saving earlier rather than later, it’s not too late to start building wealth in your 50s. In this decade of life, there are still smart moves you can make to help strengthen and grow your finances. Of course, as you get closer to retirement, the financial choices you make begin to carry more weight, so how you save and invest during this decade of your life will directly affect what your life looks like in retirement.
Below are six moves you can make in your 50s to build your wealth and better prepare yourself for retirement.
1. Build a Budget for Retirement
One of the most crucial aspects of proper money management in any decade of life is having a budget that appropriately reflects your financial reality and future goals. You’ll want to start by looking at how much you have saved for retirement, along with how your income and expenses are going to look as you get closer to that next phase of life. Don’t forget to factor in healthcare expenses as they’re one of the biggest roadblocks to financial security that retirees face. If your savings is still lacking, look at where you might be able to cut out some unnecessary spending in your life – now is really the time to singularly focus on saving as much as you can for the next stage of your life.
2. Eliminate Any Lingering Debt
While you’re still working and have a steady income that you can depend on, now is a good time to tackle your debts so that you can leave that financial stress behind once you retire. It’s financially savvy to start with your higher balances and any debts that have high interest rates. And while that’s a good idea, it may help you stay motivated to start with your smaller balances instead. Being able to watch yourself cross off debts one at a time can give you the motivation and confidence you need to finally face those larger balances. Whatever avenue you choose to take to stamp out your debts, what matters is that you stay committed to eliminating as much of them as possible before you leave the workforce.
3. Beef Up Your Retirement Accounts
With decades of work behind you, chances are you’ve been putting some money away into your retirement accounts consistently. Now that you’re in your 50s though, it’s time to maximize your contributions and get as much as you can out of compounding interest. So, start maxing out your 401(k), 403(b) and other retirement savings accounts. Once you hit age 50, you’re able to contribute an additional $1,000 into your IRAs, which can be a great super boost to your savings, too.
4. Rebalance Your Portfolio
As a young investor, taking more risks with your investments is smart, and it can be exciting, too. However, the closer you get to retirement the more you’re going to want to begin scaling back the risk in your portfolio. After all, you’re going to need to depend on that money to provide you with an income stream once you no longer have traditional paychecks. Take some time to review your portfolio and pull your money out of your riskier stocks to invest them into ones that are more stable. You’ll also want to be sure that your investments are properly diversified so that you don’t have all of your eggs in one proverbial basket.
Concluding Thoughts on Building Wealth in Your 50s
You can make smart retirement planning moves at any stage of life, but your 50s are the time to be sure that you have a firm grasp on your plans, and you know what steps to take before you finally say goodbye to your working life. If you’re not where you think you should be on your savings journey, that’s okay – you still have time make progress toward building wealth in your 50s. You just have to be diligent and intentional about it. The above tips are meant to help you boost your finances and bring you closer to accomplishing your money goals for retirement.
If you think you would benefit from a conversation about how to build your wealth in your fifties, or at any age for that matter, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.
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Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents of it on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.