Summer is here. Covid cases have declined. Outside is officially open. As you enjoy being able to leave your home and live life as you did before the pandemic, be mindful of your spending. Despite the delayed gratification we all had in 2020, the urge to make up for lost times might be good for our psyche but bad for our wallet. If you aren’t careful, you could find yourself spending way more than you anticipated. In order to continue to progress in your financial goals, avoid these 5 money mistakes this summer:
1. Going out to eat too often. Whether it’s brunch, happy hour, or a birthday dinner many people tend to eat out a lot more frequently in the summer. I know I do. With the increased prevalence of food delivery apps like Doordash and Uber Eats, I order takeout meals more often as well. If I’m not careful, I can easily spend $100-200 a week eating out. Although the food may taste amazing and the time with friends can bring happiness, these endeavors, when done on a frequent basis, can be quite expensive. In order to be a money savvy young professional, we must be mindful of this added cost. It’s not that we can’t eat out at all, it’s that we must resist the urge to do so too frequently.
2. Not having a budget when you travel. Now that things are opening back up, one of the things many of us cannot wait to do is travel! We long to get out of our homes and away from our cities to visit someplace else. Although traveling can be fun and provide a much-needed break from our current lives, don’t forget to budget! Many of us factor in the cost of a flight and hotel, but we underestimate how much we will spend on food, uber rides, drinks and entertainment after we arrive. If we aren’t careful, those expenses can add up quickly and before you know it, you’ve spent way more than you planned and re-accumulated the credit card debt you worked so hard to pay back. Avoid this by budgeting appropriately. Before you go, estimate how much you will spend on incidentals like snacks, drinks, and transport. Find ways to cover those expenses without putting it all on a credit card. Don’t let improper planning turn your vacation into a financial catastrophe.
3. Overspending at bars/lounges and happy hours. If there’s one thing friends love to do in the summertime, it’s go out. Although many of us may no longer be in clubs until 2am, we likely still enjoy a good happy hour after work or a nice lounge on the weekends. Although there is nothing inherently wrong with these activities, they can serve as unexpected money pits that take away all of our disposable income. If you aren’t careful, you can easily drop $20-30 on drinks, another $20 on an appetizer and tip. Before you know it, you’ve spent almost $50 and still need to get dinner. While this may not break the bank if done every once in a while, hitting a happy hour every week can start to add up. Nightclubs and lounges can be even more expensive, especially if you try to get a section to sit down and split a couple bottles or drinks with friends. You can easily send $200-300 if not more, on a night out. While this can lead to great times with friends, don’t let it shatter your financial goals. Try to set a spending limit when you’re out and don’t go over that amount, That way you can enjoy the evening without overspending and regretting it in the morning.
4. Buying new clothes for every occasion. Whether it’s the desire to post photos in new outfits or the unexplainable feeling of excitement I get whenever I purchase a new dress, one of the financial mistakes I used to make a lot is shopping. Specifically speaking, I loved to buy new clothes for special occasions and in the summertime, there was ALWAYS a special occasion like a friend’s birthday party, entertainment event, or upcoming vacation for me to shop for. Although shopping and wearing new clothes brought me joy, seeing my bank account diminish soon after I got paid was definitely NOT a good feeling. If you’re like me, and can get a little carried away when it comes to shopping, try to put barriers in place and approach things differently this summer. Delete text messages from stores about sales, unsubscribe from store emails, make a concerted effort to re-wear things you haven’t worn in awhile, and resist the urge to buy something new when you have other outfits in your closet that could work just fine.
5. Underestimating the costs of weddings/special events. Another thing we need to be careful not to do this summer is underestimate the costs of special events like weddings. As we enter our late 20s and early 30s many of our friends and co-workers may start getting married and having children. This means there will be lots of engagement parties, weddings, gender reveals, and baby showers to attend. Although these events may create memories that last a lifetime, make sure you plan ahead. This means setting aside money each month for these costs and understanding that you may not be able to make ALL of the events. Set a budget and plan ahead.