Did a free-spirited, alien version of yourself take over your wallet and start swiping while you were on vacation this summer?
Souvenir? “Sure, honey.”
Posh, trendy restaurants? “We may never be here again.”
Spa treatments? “They’ll really help me unwind.”
Golf at an exclusive course? “I can’t turn down an invite like that!”
Recognize “Vacation You” in that line of thinking? Now that you’re back home and going over your finances, “Practical Self” is reeling at the havoc he caused. “Vacation You” seemed to have gotten into everyone’s head that week, completely blowing the family budget for the next several months.
You are not alone! After all of the planning, saving, and preparing for this vacation, you and your whole family were ready to blow off a little steam, have fun, and make memories. However, the mortgage company and the utilities companies are not likely to sympathize, and they will still expect payment on time.
Let Hayes and Associates help you get your family budget back on track!
Don’t Panic: Make a Plan
Everyone gets caught up in the moment sometimes, wanting to simply say “yes” and enjoy the experience without having to analyze every outgoing penny. Give yourself a little grace and understanding. It happens. It’s not the end of the world, but it will require discipline and action on your part to get back on track.
1.Take stock of the situation.
How badly was the family budget blown? Was it a seismic event, or are you slightly off-kilter now? Knowing exactly where you stand will make it possible to formulate a reasonable and actionable plan to get back on track.
2.Look at due dates for upcoming bills.
Make a prioritized list and calculate what you owe. Pay especially close attention to your credit cards. Sure, they’ll accept a minimum payment from you, but if you are carrying a balance, you will be paying hefty fees every month. Make it a priority to get that credit card paid off as quickly as possible. Cut out all superfluous spending until the debt is resolved.
3.Identify sources of funding.
Do you have an emergency fund set aside for times like this? Can you delay the purchase of a big-ticket item for a short period of time? What can you forego for the next few months to free up some cash?
4.Identify your vulnerabilities.
It’s important to self-reflect when you find yourself in tricky financial situations. How did it happen? Was it merely a carefree attitude? Did you miscalculate the cost of the vacation? Did unforeseen expenses crop up?
By understanding the “why” behind the blown budget, you can proactively put steps in place to keep it from happening again. Keep “Vacation You” on a short leash, allowing for small indulgences, but not over-the-top extravagance. Research costs ahead of time and depart for your vacation with full understanding of what you’ll have to pay. Keep some money set aside for those unknowable emergencies and surprises.
5.Make the family budget a family priority.
All of you went on vacation. All of you were a part of the spending spree. Now enlist the participation of the whole family in getting back on track. It can be a tremendous learning experience for your children to understand how budgets work, learn how to save and delay gratification, and work toward a goal as a team.
Make it fun. Instead of complaining, “We can’t go out to eat,” try some new recipes and get the whole family involved in preparing a meal for thriftiness and family time all in one.
Make it a challenge. Let everyone help plan a “No-spend weekend.” Challenge kids to dig deep in their closets for that forgotten Lego set, an unopened board game, and other underutilized toys. Need to get out and burn some energy? Take a family bike ride, picnic at a favorite park, or even take a flashlight hike for a whole new view of the neighborhood.
Keep the Family Budget Healthy
Both while you’re recovering from vacation and for maximizing future opportunities, it pays to adopt thrifty, budget-friendly habits. See how much debt you can pay off, and then begin to save with these practical tips:
- Use cash whenever possible. When you’re out shopping take a predetermined amount of cash with you…and nothing else. When the money is spent, your shopping is finished.
- Always have a plan when you go shopping and stick to the list.
- Give yourself a mandatory waiting period (A week? A month?) when something new catches your eye.
- Carry your lunch to work.
- Limit eating out. Prepare and enjoy meals at home.
- Reduce your consumption of water, power, and other utilities.
- Opt for Do-It-Yourself home projects if you possess the tools and knowledge.
- Take advantage of resale sites and earn cash for items you no longer need.
- Plan ahead for birthdays and holiday spending. Shop summer sales or set aside a “Christmas fund.”
- Plan and save up for major expenses, such as home repairs or school tuition.
- Refinance loans for your home or car.
- Bundle cable and internet services.
- Make the most of bulk-buying and sales on items that you use regularly.
- Shop around for deals on cell phone plans and internet service providers. Both are notorious for new customer promotions that expire and leave you with hefty monthly fees.
- Establish a vacation fund and contribute to it with every paycheck. When your trip rolls around, take that money with you and strive to not spend beyond that. (We do recommend having emergency resources available if you experience a true emergency.
Financial Strain is Not a Permanent Condition
We must reiterate your current situation is not the end of the world. As you take steps to right the family budget and proactively work toward avoiding future snafus, remember and hold on to all the wonderful experiences, memories, and togetherness your family experienced. The debt will not last. The memories will be with you always.
If you need assistance in establishing, correcting, or prioritizing your family’s financial health, let the friendly experts at Hayes and Associates help you. We believe financial education is an invaluable first step to security and wise investing, and we’d love to help your family make the most of its resources. Give us a call today!
