It's always important to stick to your budget. And with summer upon us, that could be a difficult task as parents try to keep their children entertained or prepare to leave on their annual holiday. Natalie Storey, an executive consultant at Acuma Wealth Management, gives us her top tips on how to follow - and stay - within budget, regardless of what time of the year it is.
1 Work on a summer budget
It is worth putting a budget together with the amount you can afford to spend each week or month on activities to occupy yourself and your family during the summer months. Make sure you plan ahead. It is also a good idea to start saving in advance to help with the financial strain this period might cause. I suggest that every year, starting from September, you look at what you can afford to put into a savings pot each month for your summer holidays. When the summer rolls around nine months later, you will have the surplus money available to do the things you would like to do. Make sure you have a separate bank account to keep this money in.
2 Plan ahead
A useful tip for this summer is to collect all your receipts for all the activities you do, including weekends away, flights, smaller activities like days out at the aquarium and new toys, just to name a few. Keep a tally of everything you spend during these summer months so you will know how much you will have to put aside from September for the next nine months. This pot of money can also act as a reserve for any other unexpected activities. If you plan in advance for these things, you will be able to enjoy your summer more without any financial worries.
3 Stick to your annual budget
A yearly budget enables you to have a financial preview of the whole year and allows you to compare it with your annual income. This can be done by putting your monthly income and outgoings, including food, shopping, petrol, entertainment and other expenditure, into a spreadsheet. This allows you to see the surplus you have for savings - and what you can possibly put away for the holidays.
4 Track the smallest amount of income
You should count as much as possible in your yearly budget so that all the money you receive has already been assigned a task to perform or kept as a saving. This ensures that you are in control of your finances. You should also consider provisioning fixed as well as variable spending in the budget.
5 Provision for emergencies
This is something that many people neglect when they do a budget, but it is very important. Emergencies are unpredictable and, therefore, you need to prepare for them. I recommend you have three to six months of family spending in an emergency fund. If you have not already built this fund, it should be your first priority.
6 Review with family
It is all well and good making a budget, whether for the year or just for the summer, but you need to review how things are actually going. I suggest that every three months, you schedule a review session with your family so you can see what you have actually spent over the previous months and how this compares with your budget. It's also a good time to suggest new cut backs and future plans for saving.
7 Pay off credit-card debt
This is very important and needs to be the first priority before you start to save. Despite most of our good intentions to pay the balance off quickly, the reality is that we often end up paying far more for things than we would have paid if we had used cash. This is particularly important in the summer months, when you are more likely to throw caution to the wind and splurge on extra treats with your credit card while on holiday.
8 Automate your financials
When building a budget, you should also consider automatic bill payments and investments. This will make your life easier and also make sure your bills are paid on time and you do not receive any interest for being late. It also ensures a stress-free holiday.
9 Budget for big expenses
Events like children's birthdays, Christmas and holidays all cost money and they can be felt hard at the time of having to pay them. However, if you have planned for these events in advance, they can come out of the budget.
10 Stick to the budget
It is a good start to make a budget, but unless you stick to it and use it, there is no point in having one. A budget enables you to avoid unnecessary spending, while using your money wisely will become easier - for you and your family.