Summer holidays are often a financial pinch point for families, but households may find that forming new habits now could make their budgets go further in the warmer months of the year, according to a finance expert.
With concerns about the costs of many household bills rising, and the impact of the conflict in the Middle East on prices, some people may find they have a smaller pot of cash left over for discretionary spending than they were hoping for.
Chris Henderson, save and pay director at Tesco Bank, said: “As we look ahead to summer, many will be thinking about their social calendar and going on holiday.
“Sustaining an active social life can come with a cost, but it can be achieved with some healthy spending, budgeting and saving habits. Taking small steps now can make a world of difference and ensure you’re in a good financial position to enjoy the summer.”
Here are some suggestions from Mr Henderson for stretching summer budgets further:
1. Prioritise savings pots.
Splitting money across different pots can mean it takes longer to reach individual goals. It may be worth some people considering how urgently they need to achieve a particular goal and whether to prioritise a shorter-term one, such as a holiday, over another goal that is less “time sensitive”.
If someone has a long-term savings goal that is important to them, however, this may still take priority over shorter-term spending.
2. Consider selling items that are no longer needed.
Selling items through online platforms could be a good way to generate some extra money for summer holiday budgets.
3. Try out a budgeting “rule”.
To help stick to a budget, some people may consider aiming to set a percentage of their income to put aside for savings, while also factoring in the proportion they need to set aside to pay essential bills and a percentage to pay for non-essentials.
4. Try automating savings to help remove temptation.
Automatically transferring money directly into savings could help to avoid the temptation to spend it.
5. Consider a “no spend” challenge.
Setting a challenge not to spend on discretionary purchases for a period of time could help some people to reach their savings goals faster. Cancelling subscriptions which are little used could also help to turbo-boost savings.