1. Assess the Damage
First, you’ll need to take a deep dive into your bank accounts so you can make note of:
- How much you spent
- How much debt you acquired
- For credit cards, what type of interest rate you’re paying
You may also benefit from seeking out credit card counseling services. Counselors can help you develop goals or link you up with educational programs on money management.
2. Make a Game Plan
If spending came from a checking account, it’s important to document the total amount so you can better budget for next summer’s activities. The Federal Trade Commission has a budget worksheet that works as a great resource for any time of year.
If spending was done via credit cards, it may make the most sense to prioritize paying off the one with the highest interest rate first. The Consumer Financial Protection Bureau put out a guide on understanding debt reduction strategies, which can assist you in this process. You can also research if a personal loan may be the right choice for you. Using this method, you can consolidate your debt into a single payment, typically with a much lower interest rate.
There’s also a variety of websites and apps to help you best strategize repaying your debt. However, when seeking out resources, always make sure you’re using reputable businesses to assist with your financial needs. The Consumer Financial Protection Bureau and the Better Business Bureau are both great websites to research a company’s legitimacy.
3. Scale Back on Spending
Now assess the rest of your monthly spending. Are there entertainment subscriptions you could cancel? Instead of going out to eat several times a week, can you commit to making more meals at home? Or maybe there are alternatives to your transportation, like carpooling, public transit, or riding your bike as the weather cools off. You’d be surprised how making small and temporary adjustments could go a long way!
4. Work on a Savings Plan
Chances are you’ll be in this dilemma all over again next year if you don’t plan. Set a reminder in a few months, once your bank accounts are cleaned up, so you can estimate how much you’ll want to spend on activities for next summer. This is where your knowledge of this year’s total summer spending will come in handy! Will you try to scale back that number, or are you hoping to beef it up a bit? Whichever route you decide, you’ll thank yourself for having an action plan set in place.
5. Plan for a Secure Retirement
Now that you’re familiar with the value of financial planning, it’s easy to incorporate similar objectives throughout other aspects of your life. For example, boosting your retirement savings, preparing for unexpected retirement costs, or creating a retirement checklist.
We also have a video series dedicated to planning your financial future, which we’re sure you’ll find useful. Using these resources will not only set you up for success in your summer spending, but all year long.