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Budgeting and Spending for Summer Months

Summer Spending Spree

Americans are known to spend big when summer beckons, often dipping into savings or racking up credit card debt for vacations and other entertainment. Summer is typically the second biggest spending season of the years, with an extra $2,229 on discretionary spending,

With two pandemic under ours belts, a majority of Americans—53%—say they are making plans to treat themselves this Spring or Summer to mark the end to pandemic related restrictions, and and the number of COVID case falling, according to a March survey.

At the same time, nearly half of U.S. residents — 47%— say they don’t plan to increase their discretionary spending this summer, notes the same survey of 2,500 adults.

Total vacation spending in 2021 for American households was expected to exceed $150 billion. That total — $153.7 billion — represented a 160% increase over summer vacation spending in 2020 and a 50% increase from 2019.

Try the 50/30/20 budget

If you don’t have a household budget, the 50/30/20 spending plan works like this:

So if you bring home $4,000 a month after taxes, $2,000 should be used to pay for housing, transportation, utilities, insurance, etc. Then 30% can go to the fun stuff such as entertainment, dining out, streaming services and trips. The remaining 20% should go to savings.

Make a separate summer budget

Once you know the monthly 30% for your “wants,” use that amount to determine how much you have for the extras this summer. To help stick to your budget, write down all of your anticipated expenses including childcare, camps, entertainment and any trips you’re taking for weddings or a vacation. Then estimate how much each one will cost to get a better idea of any shortfalls.

Content by Savvy Money

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