Financial expert Catherine Winter sets out her tips for managing your money this summer.
It’s no secret that summer can be one of the most expensive times of the year. We feel compelled to be out of the house making the most of the sun while it lasts. Many of us go want to go abroad, enjoy exciting day trips, and socialise in the long light evenings. But, if you’re not careful with your spending, all of this can become quite costly very quickly.
When you’re out enjoying the sunshine, it’s easy to forget about the damage that summer spending can do to your bank account.
Despite this, there are steps you can take to minimise your expenses and still enjoy the holiday season.
Don’t break the bank to enjoy your summer
You don’t necessarily have to spend all your hard-earned savings on flights and hotels. By planning ahead and shopping around you can save pounds and still have fun.
Why not sign up to sites like Wowcher and Groupon? Both websites offer cheap travel packages. With offers on UK city breaks, beach holidays, cruises, European city breaks and more, you’ll be spoilt for choice. And for those who want to avoid the hassle of travelling and are craving something more relaxed, there are also plenty of discounted spa breaks, cinema deals and theatre offers to browse through.
When making travel plans booking in advance can help you bag cheaper tickets, whether it’s by plane, coach or train.
Summer is also a good time for dining out and pub trips when catching up with loved ones. One way to minimise this cost is to look for discount codes and deals. Sites like VoucherCloud, VoucherCodes and MoneySavingExpert do offers on restaurants and bars and can help you stay within your budget.
Budgeting – where to start?
So now you have a rough idea of the things on your summer to-do list, the next step is to make a budget and stick to it.
If you find budgeting difficult, boring, time-consuming – or all of the above – why not try out a budgeting app?
Money Dashboard allows you to monitor your credit cards, savings and current accounts, all in one place. It has really useful graphs which categorise where you’ve been spending your money – a great way to assess what you need to cut down on. You’ll also receive notifications when you’re close to overspending, allowing you to keep your budget on track!
Yolt has similar benefits and may be useful if you’re going abroad this summer, with a feature which enables you to find the best exchange rates.
Credit cards – a useful way to manage your spending?
Another way to track your spending is through credit cards. Credit cards may seem scary but, when used wisely, they can help you enjoy a great summer while building your credit rating at the same time.
Using a credit card for smaller, manageable expenses is a great way to build your credit score. To minimise or avoid paying interest, set up a direct debit to pay off your bill each month. By paying it off in full, you won’t have to pay interest. That works out cheaper than using an overdraft (especially if the overdraft isn’t authorised beforehand!)
If you’re jetting off abroad, make sure that you’re aware of how the exchange rate will affect each payment you make. With some credit cards transaction fees can add around one to three per cent to your payment – which can really add up. Some cards also have cash withdrawal fees, as well as charging you interest on any cash you withdraw.
Find a credit card provider that doesn’t charge ATM withdrawal or transaction fees. Have a browse to see which credit card would suit your travels best – sites such as MoneySavingExpert and MoneySupermarket can help. But, while many cards don’t charge you for using an ATM, beware of withdrawing cash on your credit card as most charge daily interest on cash withdrawals until you repay the cash you’ve withdrawn.
When paying by card always pay in local currency, regardless of whether the retailer asks you if you’d like to pay in pounds, as it usually works out cheaper.
Prepaid travel cards
If you don’t want to take lots of cash away with you, why not look at a prepaid travel card. You ‘load’ these with different currencies before you travel, and then you use them like a debit card.
That means you can withdraw cash from ATMs without paying interest (although be aware that some ATMs and foreign banks will make a charge) and you can ‘top up’ the card via an app while you’re away. Most currencies are supported. You can also use them for contactless and other card payments.
Look at money comparison sites to find the best card for you.
Sit back and relax!
So now you’ve got your finances sorted, relax and enjoy the sunshine!
About the author
Catherine Winter is Head of Financial Capability at The London Institute of Banking & Finance, a leading provider of financial education: in schools, at GCSE and A Level; at degree and post-graduate level at its university campus in London; and with its professional qualifications in banking, investment and regulated advice. The Institute is a charity, incorporated by Royal Charter.