As we approach summer, our thoughts often turn to summer fun such as a vacation, weekends at the lake, baseball games and other outdoor activities. The kids are off from school, and it can be a fun time for you. 

Along with that fun, it is important to stay on top of your finances and also to ensure that you do not neglect good spending and savings habits. 

Improving Financial Habits This Summer 

Any time of the year is a good time to look to improve your financial habits. Some tips for this summer include: 

• Put your financial goals in writing. You can think about them or even discuss them, but until you commit your financial goals to writing they are not official and there is nothing to follow. 
• Create a budget for spending. 
• Set savings goals. Again, commit these to writing so you have something to follow. This includes an emergency fund and longer-term savings plans or goals such as retirement and college. 
• Make a plan to pay down your debt. 

As we move to the midpoint of the year, be sure to review your tax situation for the year. Are you having enough withheld from each check to ensure that you do not end up with a big tax bill at tax time? If not, this can result in a big outlay that can cause you to spend down money you have saved for other reasons. 

How to Save Money on Everyday Expenses and Increase Savings 

The key here is to have a formal budget and to track your progress against that budget each month. The budget should include where money will be spent including your monthly essentials such as housing, food, debt payments and other regular expenses. 

During the summer, it is important to budget for fun, whether this is a formal vacation or some smaller excursions. The money must come from somewhere, so be sure that summer fun does not ruin your overall financial wellbeing. 

Ensuring that summer fun is covered within your overall budget can help ensure that you do not overspend during the summer. This can help ensure that you are able to meet your savings goals; hopefully these are also outlined in your monthly budget. 

Beyond developing and sticking to a budget, it is important to be a smart consumer. Shop around when planning a trip or making any sort of purchase. With the internet saving money on even everyday purchases can be easier than ever. The savings on each purchase may not add up to a lot, but getting into the habit of being a selective and frugal shopper can add up to significant cumulative savings over time. 

Small Changes Can Have a Big Impact 

While all of us would love to win the lottery or inherit a large sum, the reality is that this is very unlikely to happen. Rather, small changes can make a big impact on your savings and your ability to accumulate wealth over time. Some examples of small changes include: 

• Get in the habit of saving every month. Whether it is saving to accumulate an emergency fund or to save for a major purchase, saving a little bit extra each month as your ability to do so grows can add up over time. 
• Contribute to your company’s 401(k) or other retirement plan as soon as you are eligible. Even if you can only contribute a little, it is a start. Make sure you increase your contribution amount at least a little each year. Over time you will be amazed at how much this adds up to. 
• As you earn more money, beware of “lifestyle creep”. There is nothing wrong with using extra income to buy some of the things you want but be sure that you do not stray from having a budget and monitoring your spending. 

• Build and maintain an emergency fund to help mitigate the financial impact of unforeseen major expenditures like weather damage to your home beyond what insurance might cover or expenses arising from a serious illness or a job loss. 

Talk to your Wedbush financial advisor for other ideas as to ways to jump start your savings and your investments.  

 

Disclosure  

Wedbush Securities does not provide tax or legal advice. Please consult your tax or legal advisor.  

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.  

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