Summer is a time to cut loose and have fun. But, if you’re not careful, that fun can lead to overspending, failing to keep tabs on your finances and making money mistakes due to distractions.
You certainly don’t want to be paying for those mistakes the rest of the year. So, to maintain your financial well-being while enjoying all that summer has to offer, avoid making these money mistakes in the coming months.
1. Overspending on Summer Fun Rather Than Saving
There are plenty of temptations to spend in the summer — on travel, concerts, cocktails by the pool and nights on the town.
“For whatever reason, people can't prevent themselves from spending out of their limits during the summer,” said Michael Cirelli, a financial advisor with SAI Financial Services in Illinois. And they do so at the expense of their savings.
However, you shouldn’t stop contributing to your retirement account to fund summer fun. To avoid the temptation to overspend, Cirelli recommends having contributions to retirement accounts automatically deducted from your paycheck or bank account. Then you can only spend what’s left after funding your savings.
2. Not Having a Budget for Summer Activities
To avoid overspending in the summer, you should plan activities in advance and create a fund to cover the cost, said Frederick Towles, an accountant and personal finance coach. You can open a separate account or even put cash in an envelope — and stop spending once the money runs out.
Without a budget for summer fun, you could end up relying on credit.
“I have seen families finance their summer fun on their cards, and they are still paying for their previous summer's fun during the current summer,” Towles said. “That's not the summer fun we want.”
3. Missing Payments While Traveling
It’s easy to miss deadlines for bills — or forget to make payments entirely — while traveling.
“If you forget, expect late fees and a ding to your credit report,” said Jim Wang, creator of the money-saving blog WalletHacks.com.
To avoid the cost of fees and a drop in your credit score, set up automatic payments through your service providers or your bank, so your bills are paid while you’re on vacation. If there are bills you can’t pay automatically, and you forget to make a payment, call the billing department to explain why you missed it and ask to have the late fee waived, said consumer expert Andrea Woroch.
4. Not Putting Mail Delivery on Hold
Forgetting to contact the U.S. Postal Service to stop mail delivery while you’re on vacation could put your finances at risk.
“When your mail stacks up, you’re leaving yourself susceptible for theft and fraud,” Woroch said. “If an identity thief gets his hands on credit card offers or bills, for instance, he or she might be able to open an account in your name.”
To lower your risk of becoming a victim of identity theft, you can put a hold on your mail by filling out an online form at USPS.com.
5. Failing to Keep an Eye Out for Fraud
Whether you’re traveling this summer or just staying busy by having fun in the sun, it’s easy to forget to keep tabs on your accounts for unusual fees or activity.
“We are out spending money, using debit and credit cards and not really checking our statements to detect any fraud,” Towles said.
However, you shouldn't let your guard down during the summer. Log on to your bank and credit accounts regularly and set up alerts to receive text messages or emails when charges are made to your accounts to spot fraudulent activity quickly. Additionally, you should get a free copy of your credit report at AnnualCreditReport.com to make sure unauthorized accounts haven’t been opened in your name.
6. Falling Prey to Summer Scams
Scammers take advantage of a variety of opportunities during the summer months to get people to part with their money. If you’re not careful, you could become their next victim.
One of the most common scams involves offering deeply discounted vacation rental properties or vacation packages, according to the New York State Attorney General’s office. Deals that seem too good to be true and require an upfront payment or wire transfer are red flags. In many cases, vacationers arrive at their destinations only to find that the rentals don't exist.
7. Cooling an Empty House
The air conditioner likely takes the biggest bite out of your home energy bill during the summer by accounting for nearly 50 percent of your energy use, Woroch said. So, if you leave the temperature setting too low while you’re at work or on vacation, your energy bill will likely soar.
Woroch recommends installing a programmable thermostat, so the temperature will automatically adjust while you’re away to keep you from wasting energy cooling an empty home. Over the course of a year, a programmable thermostat can cut about $180 from your electric bill, according to Consumer Reports.
8. Keeping the Blinds Open During the Day
When you’re heading to work, close the blinds to keep the sun's rays from warming your home and making your air conditioner work harder — which means a higher electric bill, Woroch said. Reflective blinds can reduce heat gain by about 45 percent when closed and lowered, according to the U.S. Department of Energy. And medium-colored draperies with plastic backings can reduce heat gain by about 33 percent.
9. Leaving Electronics Plugged in While on Vacation
If you leave electronics plugged in when you leave for vacation, you’ll be paying for electricity you’re not using.
“Everything from your entertainment system — think cable box, TV and speakers — to your home office to small kitchen appliances, like the toaster and coffee maker, continue to consume energy when plugged in even in the off mode,” Woroch said. “When going away for any length of time, get in the habit of unplugging such devices and appliances.”
You can also use a power strip to turn off energy vampires with the flip of a switch. Doing this can shave 5 percent or more off your home energy bill, Woroch said.
10. Setting the Water Heater Too High
Leaving the water heater at its regular setting when you go away on vacation can result in wasted money, too, Woroch said. She recommends switching to the lowest setting or turning it off while you’re away.
Even when you’re at home, you should turn down the temperature on your water heater during the summer. You can save up to $30 on your energy bill for every 10 degrees you lower you water heater temperature, according to the Department of Energy.
11. Buying a New Air Conditioner Without Research
If you need to replace your air conditioner during the hot summer months, don’t let the heat push you into making rash purchasing decisions. Although July is a prime time to buy AC units with regard to both selection and price, there are considerations beyond the cost, according to Brent Shelton, an online shopping expert with FatWallet.com.
It’s best to consult with a professional or do extensive research on ratings and proper installation techniques to get the most out of a big-ticket investment, he said.
12. Overpaying for Child Care
Paying for child care during the summer when kids are out of school can easily break your budget. You might be able to cut the cost by pooling babysitting resources, according to nonprofit financial counseling agency, Take Charge America.
For example, you could hire one babysitter to watch several children in the neighborhood and split the cost among multiple families. Or, you might be able to get several family members or friends to take turns watching the kids.
13. Spending Too Much on Summer Activities for Kids
“Families with kids are paying a pretty penny to keep their children busy in the summer,” said Annalee Leonard, founder of Mainstay Financial Group in Pensacola, Fla. In fact, parents spend more than $950 per child on average for summer activities, according to a report by American Express.
Fortunately, there are several ways to minimize these costs, Leonard said. She recommends looking into summer camps offered through your city's recreation department, community center or YMCA. Many churches and religious groups also offer affordable camps and programs for youngsters.
14. Taking a Vacation Rather Than a Staycation
It’s fun to get away, but taking a vacation can put a strain on your budget. Americans who plan to travel this summer expect to spend an average of $941 per person on their trips, according to the American Express Spending & Saving Tracker.
Planning a staycation — rather than a vacation — is a way to cut costs and explore the town in which you live. This option eliminates two of the biggest expenses: lodging and transportation costs.
“Just remember if you are planning a staycation to really make it a vacation," said Leonard. "Take a break from work and the chores around the house.”
15. Charging a Vacation to a Credit Card Without Plans to Pay It Off
If you do take a vacation, you shouldn’t charge it to your credit card without a plan to pay it off immediately, said Jeff Jones, a certified financial planner with Longview Financial Advisors in Huntsville, Ala.
For example, if you charge a $3,000 beach vacation for your family of four to a credit card with a 9.90% APR and pay it off over 18 months, it would cost you an extra $240 in interest, he said. If your APR is 19.90%, it would cost you an extra $494 in interest.
16. Not Being Flexible With Travel Plans
Flights in the summer tend to be more expensive because there’s an increase in demand, said Kyle Taylor, founder of the money-saving blog, The Penny Hoarder. And you’ll pay even more if you’re not willing to be flexible about the day of week you fly.
For example, the highest fares for flights in July are on Sundays, according to CheapAir.com. You’ll save $104 per ticket, on average, by flying on a Tuesday instead. Taylor recommends using an airline or travel site’s "flexible dates" option when searching for flights to find the lowest fares.
17. Waiting Until the Last Minute to Book a Flight
If you plan to fly to your summer vacation destination, don’t wait until the last minute to book your flight. You’ll pay about $200 more per ticket, on average, if you book a flight within seven days of departure than if you book a flight three weeks to three months in advance, according to CheapAir.com. If you book between seven and 13 days from departure, you’ll pay at least $75 more.
18. Overpacking When Flying
Overpacking can be a costly mistake, especially if you're flying on an airline that charges you to check bags, Wang said. For example, American Airlines, Delta and United all charge $25 for the first bag you check and $30 to $35 for a second bag.
You can avoid fees on most airlines by taking only carry-on bags — which means packing only the essentials, Wang said. Or, you can stick to Southwest Airlines, which lets passengers check two bags for free.
19. Saying Yes to Car Rental Upgrades
If you rent a car for summer travel, don’t feel pressured to say yes to add-ons or upgrades.
“Be polite to car rental agents trying to get you to spend more money, but decline their invitations to upgrade your vehicle, pay for insurance or prepay for gas,” said Kendal Perez, a savings expert with Coupon Sherpa. “Upgrading your car will only result in additional rental fees and gas costs, while insurance coverage is likely redundant with that provided by your personal auto insurance or your credit card.”
For example, during a vacation in Hawaii a couple years ago, Perez opted to keep her original economy car rental despite the temptation and aggressive sales pitch to upgrade to a convertible Mustang.
“Between rental fees and gas mileage, I likely saved between $100 and $200,” she said.
20. Using Debit Cards to Reserve Hotel Rooms
If you don’t use credit cards — or use them only sparingly — be careful about using a debit card to reserve a hotel room for your summer vacation, Perez said. Some hotels charge an "incidental deposit" as a security deposit or for other possible charges to your room, such as room service.
Typically, the charge is removed shortly after you check out. However, that money is on hold, meaning you might not be able to access needed funds in the event of an emergency. Save the expense and headache by reserving rooms with a credit card instead, Perez said.
21. Using the Wrong Credit Card Overseas
A common mistake that novice travelers make when overseas is using their regular credit cards without checking to see if they charge foreign transaction fees, Wang said.
While many card companies charge these fees for currency conversion, some issuers offer no foreign transaction fee cards, which can save you up to 3 percent per charge, Wang said. So, sign up for one of these cards before heading overseas.
22. Not Notifying Your Card Company About Your Trip
If you travel outside of your normal geographic region, let your credit card company know in advance. If you don't, the company's fraud department might think your purchases are fraudulent, Wang said.
“This can be a very big headache if you're outside of the country, don't have much of the local currency and were expecting your credit card to complete a purchase,” he said.
23. Using Public WiFi While Traveling
During summer travel, people often log on to unsecure networks during layovers or while visiting local coffee shops in the cities they’re visiting, Taylor said. But travelers should know they’re putting personal information at risk when they log on to accounts using public WiFi networks, as hackers can steal their personal information.
To avoid putting your information at risk, you can use a virtual private network (VPN) to send and receive information while using public WiFi. Taylor said there are free VPN tools such as CyberGhost, TunnelBear and VPNBook to let you surf the web without worrying about online snoopers.
24. Not Waiting for End-of-Season Sales
You might want to upgrade your grill, patio furniture or warm-weather wardrobe now that summer is here. But you likely won’t get the best prices on seasonal items until the end of summer. Waiting for fall to shop can save you 50 percent to 60 percent in some cases, Perez said.
25. Not Taking Advantage of Sales Tax Holidays
You can save a lot of money by doing your back-to-school shopping during sales tax holidays, said Howard Dvorkin, founder of Debt.com. Seventeen states —primarily in the South — waive sales tax on items like clothing, school supplies and computer purchases on select days in the summer.
You can learn more about sales tax holidays at the Federation of Tax Administrators’ website, Taxadmin.org.
26. Buying Produce That’s Not in Season
With the abundance of fresh fruits and vegetables available during the summer, it doesn’t make sense to spend more on produce that’s not in season yet. So, Taylor said you should stick to seasonal produce — such as peaches, watermelons, corn and tomatoes — to save money.
Another way to save on produce during the summer is by visiting your local farmers market, Taylor said. Or even better, grow your own food.
27. Paying for the Gym When You’re Exercising Outside
If you’re taking advantage of the nice weather to exercise outside, don’t keep forking over money for a monthly gym fee. Instead of opting to ditch your membership — and pay an early termination fee or initiation fee to rejoin — ask if you can freeze your membership.
“You typically have to pay a small fee, anywhere from $5 to $15 per month,” Woroch said. “But, depending on the cost of your original membership, this can be a huge savings.” There’s usually a limit on how long you can freeze a gym membership, but you should be able to do so for a few months at least.
28. Failing to Take Advantage of Free Activities
You can avoid spending a lot of money on entertainment in the summer by taking advantage of free activities. For example, your town might offer free concerts or movies in the park. And your public library might offer free events and activities, Woroch said. Check your city’s community calendar for events.
Many recreation centers, museums, zoos and botanical gardens also offer free admission on certain days of the week. For example, the Art Institute of Chicago offers free admission to Illinois residents every Thursday night, while the Denver Museum of Nature and Science offers a free day almost every month of the year, Woroch said.
29. Paying Full Price for Entertainment
Whether you’re traveling or looking for something fun to do at home, there’s a good chance that you can avoid paying full price for entertainment. For example, Leonard recommends looking for discounts on admission to amusement parks, zoos and museums on daily deal sites such as Groupon and LivingSocial.
And don’t forget to take advantage of discounts you can get through memberships in organizations like AAA or AARP. For example, AAA members get up to 30 percent off tickets to Six Flags amusement park.
30. Not Budgeting for Summer Weddings
Most weddings occur between May and October, making summer an especially pricey season if you’re invited to attend or participate in the celebrations, Perez said. For example, the cost of being a bridesmaid or groomsman can top $1,000, according to a recent GOBankingRates survey. And wedding guests spend $600 or more, on average, on travel and gift costs, Perez said.
To reduce this cost, think carefully before you accept invitations, and keep travel costs in mind. Bridal party members should carefully consider each event associated with weddings, such as bachelor and bachelorette parties and wedding showers.
“It's okay to say ‘no’ and to send a gift in your place,” Perez said, noting that you can also pick and choose which events to attend. “You can still be a member of the bridal party and opt out of other events if they don't fit within your budget, as long as you give the bride or groom notice."
And make sure what you spend on a gift is an amount you can afford.