Toning up Your Finances
It’s that wonderful time of year, when the days start getting longer, the flowers start blooming, the clothes start shrinking, and everyone starts panicking about their summer bod. We all start hitting the gym and cutting calories in the hope we will be bathing suit ready in time for Memorial Day. But while we rush to get physically fit, we tend to neglect our financial fitness.
Summer is a season of spending for most people, and just like we spend the spring months getting toned and ready for summer, we should be getting financially prepared as well.
Here are some tips for toning up your money in time for summer:
Build your summer budget and set savings goals
If you’re planning a vacation for this summer, you should start setting aside cash for it now! We have clients save for future vacations all year, but if you haven’t done this it’s not too late! Set your budget and figure out how many paychecks you will receive between now and then. How much money are you able to set aside from each paycheck in order to pay for your trip? Put that money into a separate savings account or envelope so that you don’t spend it on something else.
Sign-up for a credit cards that will earn you points!
If you are a responsible card user, there are TONS of opportunities to earn bonus points that can help pay for travel this summer. The Chase Sapphire Reserve or Preferred card earn you 50,000 points if you spend $4,000 in the first three months. The Capital One Venture card earns you 40,000 if you spend $3,000 in the first three months. Delta Gold American Express is currently offering 60,000 points if you spend $1,000 in the first three months. All are great options for helping to reduce the cost of your summer travel!
No spend and cash only days
In anticipation of future spending it’s important to cutback now! Financial Gym clients utilize no spend and cash only days to help them limit their variable spending. It’s pretty much as simple as it sounds. Pick 2-3 days per week and designate them as no spend or cash only days. On no spend days you don’t bring any cards or cash with you. You eat your meals at home (or pack them to go), and you don’t spend money any where else that day. On cash only days you set a specific goal, say $40 at the bar on Friday, and bring only that amount of cash with you. When it’s gone then it’s time to call it a night! Ideally, this practice would continue into the summer months to limit your spending.
Increase contributions to your investment/retirement portfolios now!
Sitting on some extra cash? Don’t leave it in your bank account to spend this summer! Instead be strategic with your money, invest it in your personal investment account or make a contribution to your IRA. If you don’t have either of these you should consider increasing your contribution to your 401k, you will automatically save more money. Your monthly take home will decrease so you will be forced to cut back on wasteful spending.
Make your money work for you!
Take a look at your bank accounts and see if your money is working for you. Do you have $10,000 sitting in a regular savings account barely earning any interest? It can be earning more in an online account like Ally or Capital One 360, which offer 1% interest. Capital One will even pay you $200 to move your money to them. Chase will give you $200 if you open a savings account and maintain a $15,000 balance for 60 days (but you won’t earn 1%).
The most important strategy for staying financially fit during the summer months is to be prepared! There are tons of opportunities to spend, but there are even more to save! Look into what free events are happening around you, pack a picnic and spend the day at the beach or a local park, host a summer cookout and let your friends supply the alcohol. Be creative and be mindful, and you can stay financially fit all year long!