7 Tips for Paying Off Debt This Summer While Still Having Fun
Written by
Brooke Barley
Edited by
Ashley Almario
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According to a recent GOBankingRates survey of nearly 1,000 American adults, 41% said they’re going to build their wealth this summer by paying off debt. When we normally want to tackle money we owe, we think of tightening our belt — i.e. no trips, no dinners out, no fun.
However, financial experts are here to save the day. You don’t have to completely forget about travel or restaurants if you want to get out of debt this summer. Here’s how you can still have a great time these next few months while paying off your debt.
Automate Your Debt Payments
One way to ensure you’re putting money toward debt is to make it effortless. Kevin Guarino, a partner and wealth manager at Clover Leaf Financial, said you can do that by setting up automatic payments for when you get your paycheck.
“Take the decision-making aspect out of the equation, and just automate your payments,” he said. “Your payments will be consistent, so there is no chance of forgetting.”
This way, you’ll see exactly how much you have left to put toward your summer plans, and you’ll be paying off your debt without even thinking about it.
Consider a Balance Transfer
If your main debt is credit cards, Anthony DeLuca, CFP, CDFA and expert contributor at Annuity.org, suggested transferring your balance.
“This is a process where you move credit card debt from one card to another, often with a 0% introductory APR,” he explained. “Now, you can focus on excess cash paying off the principal debt while having a little left over for summer enjoyment [i.e.] money that would have needed to go into interest payments.”
Start a ‘Sinking Fund’
Not sure what a “sinking fund” is? According to Mark Pierce, the CEO and founding partner of Wyoming Trust, it’s a way you can do more of what you want this summer while still making progress on your debt.
“Every month, you’ll allocate some money toward your summer goals, whether taking a small trip or attending a long-awaited festival,” he explained. “This is your sinking fund, and the money you dedicate to that savings depends entirely on how much you can save and the cost of your selected summer plans.”
This way, your summer fun is actually a part of your budget, so you always have a little money going toward enjoyment no matter what. Pierce added that, at the same time, you’ll dedicate a percentage of your income toward clearing your debt. “If your goal is to get rid of your debt before the fall, then this should be one of the major allocations in your budget.”
Open a High-Yield Savings Account for Summer Fun
Danielle Desir Corbett, an affordable luxury travel and personal finance expert at The Thought Card, said this is a great way to save for activities you want to do this summer.
“Set up a direct deposit from your employer to that account. Set aside a small amount of money you can afford to miss every pay period, even if it’s only $25,” she advised.
Corbett said a great part about a high-yield savings account is that you can earn extra interest on your cash without putting in a ton of effort.
Look for Cheap or Free Activities
Having fun during the summer doesn’t actually have to cost that much money. Corbett said there are many things you can do to enjoy yourself that won’t break the bank, so you can focus on paying off your debt. She suggested, “Prioritize free and low-cost activities like local concerts, county fairs, festivals, and outdoor adventures like hiking or beach outings.”
Todd Stearn, founder and CEO of The Money Manual, agreed, saying there is probably a lot to check out in your own backyard that is very affordable. “From beaches, lakes, and parks to museums, historic sites, and antique stores, you probably have several locations nearby that you always intend to visit but never do. And many of these activities are free or close to it.”
Become an Uber or Lyft Driver
This is a great way to make money on your own time to put toward your debt and travel plans.
“If you keep your locations centrally located, you’ll reduce gas costs and make good money, fast,” DeLuca said. “You can easily find balance between work, play, and a little extra driving to bring down your debts.”
Stay With Family and Friends When Traveling
When you’re planning your next trip, make sure it’s near people you know so you can skip the hotel costs.
“Lodging can get expensive for trips,” Brian Preston, CFP and host of “The Money Guy Show” said. “Consider visiting family or friends so you have a free place to stay. Plus, you’re getting quality time with family that you may or may not see that often.”
Preston added that traveling with family and friends can help make trips more affordable. “This way you can split the cost of the trip with each other. Shared costs for things like gas (if carpooling), meals and housing equals less money spent and more memories made.”
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