Tuesday, June 07, 2011

How to Save for a Rainy Day

With the prospect of summer approaching, many of our plans for conscientious saving fly straight out of the window. School holidays, trips away, new clothes and children's activities can put a real dent into the monthly budget. Suddenly all the good intentions around strict monthly budgets, credit card and mortgage overpayments, budget food spending, cash ISA top-ups and the avoidance of random spending seem a lesser priority! However, the reality of autumn is a shock to the system for those who don't exercise control and forward planning. Additionally, the sad reality of autumn is that Christmas then looms on the horizon with all of its attendant expenses and monetary demands. Make this the year that you don't get caught up in the summer spending trap and do some thinking, planning and ideally saving, well in advance, to get through the sunny holidays unscathed. As with Christmas, the summer holidays should be saved for several months ahead. If you are planning a family annual holiday at this time, then factor this in well in advance and start seeking out special advance prices. Unlike short weekend breaks booked on the spur of the moment, you can't risk leaving a family holiday to a last minute bargain. So find early bird offers instead, put a down payment on and ensure you're covered with insurance in case the travel company succumbs to the recession. Even better, why not take a 'staycation' and stay at home or nearby, experiencing the area as a tourist? Head to museums, theme parks, eat ice-cream and go to the swimming pool. Look for special offers and vouchers in the newspaper and sign up to local loyalty schemes. Midweek and family tickets are a good way to save money. Look too for activities for children that don't cost anything. Many local community groups will put on fayres and other activities for families to do together. Why not organise a street BBQ with neighbours, or club with other parents to hire a bouncy castle for a large garden? Throw a pot luck summer party, or go out cycling with a home-packed picnic. Make things together, take photographs or see an afternoon cinema screening if the weather is bad. Children especially don't need expensive holidays to have fun and it's vital that they learn the price of living as early as possible. When saving, involve them on a simpler level. Encourage them to save pocket money for holidays and offer to match their savings amounts, so they learn the value of saving towards bigger things and future goals. Tidy up your own finances too. Get rid of expensive credit and store cards and resolve to stop spending aimlessly. Transfer expensive balances to zero or low cost finance cards until you can pay them off. Budget for food, cancel the gym subscription (if you don’t use it regularly that is) and start cooking from scratch using wholesale ingredients, which are often healthier than pre-packed. Start a savings habit into a high interest savings account. Work out how much you can put away each month and make it your first direct debit. With a little pre-planning, not only will the summer period pass without financial incident, but it should also be a very happy and enjoyable one for all the family.

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