5 tips to detox from summer spending

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5 tips to detox from summer spending


Lazy days on the beach, summer concerts, fun getaways and backyard barbecues are all hallmarks of summer. The season can be filled with fun activities, but by the time summer ends, you may be left with a spending hangover.

According to a 2014 online poll by eZonomics by ING, the majority of respondents said that summer is the most expensive season of the year.

One of the potential culprits? Travel. A 2016 report by American Express found that 80 percent of Americans planned on traveling this summer, spending an average of $941 per person.

So as you transition into fall, you may want to recover from summer spending with a financial cleanse.

What's a financial cleanse?

A financial cleanse is similar to a diet. After overindulging in too many sweet treats or fast food meals, you might reset your habits by eating healthy and working out.

Under a financial cleanse, you work toward replacing some of the spending habits that may have gotten out of hand in the summer with mindful spending and saving. Here are some tips to get started.

1. Look at your spending.

After overindulging in summer, it's crucial to look at your spending and see where the damage occurred. To do this, scroll through your bank account or credit card statements, and write down every purchase that may have caused you to go overboard.

You may start to see some interesting patterns. Maybe you went out to eat more than you thought, or all of those parking passes at the beach and $5 coffees added up. This exercise can show you where your money actually went and where to cut back.

"This will help you see where your money is going and pinpoint any 'money pits' - areas in your budget where you're spending too much," says Caroline Willard, executive vice president, markets and strategy, for CO-OP Financial Services.

Luckily, there are budgeting tools such as Mint.com and Credit Karma's MySpending tool that can make tracking your expenses easy.

Using these tools, you can see your primary spending categories and get a snapshot of your financial picture.

2. Go on a 'fiscal fast'.

After getting into the habit of spending money, it can be much easier to keep opening your wallet as it's your new norm. In order to put the brakes on excessive spending, Willard recommends going on a "fiscal fast."

Willard defines a fiscal fast as when you stop spending money for a set period of time, such as a week. "This forces you to make do with items you already have in your home. You can turn it into a group event, where you do it with your family, friends or co-workers."

To ensure success, prepare by getting enough groceries and toiletries to tide you over, and find ways to frugally replace the things you were spending money on.

For example, if frequent happy hours were a budget-buster for you, get some affordable wine to tide you over until your no-spending fiscal fast ends. If restaurants were the culprit, look up new recipes to try at home.

3. Change your budget.

One of the ways we can overspend during the summer is by not budgeting for all the outings, vacations and activities we have on our plate ahead of time.

To fix this, consider shifting your budget now to prepare for next summer's expenditures. This can help limit your chances of having to go into debt or tap into your savings.

"I would advise people to review their summer spending in detail and use the information to establish an annual travel budget, to which they should begin to contribute during the off-months," says Brett Walters, Certified Financial Planner™ at Trident Financial Planning.

"If you see that you've spent an average of $4,000 to $5,000 on summer fun for the past few years, set up a savings account specifically for that purpose. Begin to contribute to it with the goal of having enough set aside by next summer," Walters says.

4. Find the urge to purge, instead of splurge.

During a financial cleanse, it's time to go through your stuff and purge.

Maybe you bought too many clothes over the summer or electronic gadgets that you barely use. Create two piles -- a "keep" pile and a "sell/donate" pile.

Some items you may just want to donate to Goodwill depending on the quality, whereas others you can resell on websites such as Craigslist, OfferUp or Poshmark. If it was a purchase within the last few weeks that you haven't used, you may still be able to return the item to the store.

Check your credit card benefits, as some cards offer an extended return program for up to 90 days after a purchase.

By purging, you can not only declutter your physical space but also potentially make some extra cash to boost your savings, pay down debt or start saving for next summer's adventures.

5. Get a side hustle.

During your financial cleanse, focus on how to earn -- instead of spend -- more money. Through a side hustle, you can earn extra cash doing various tasks. For example, you can become an Uber or Lyft driver, deliver groceries via Instacart, or become a tutor or pet sitter.

By doing this, you can monetize your skills and help recoup some of the money you spent over summer. Just be sure to decide what you'll do with the extra funds ahead of time -- if you don't have a plan in place, earning more could lead to lifestyle inflation, where you spend more because you have a higher income.

When done wisely, a side hustle can leverage your skills into money-making opportunities and help you earn more to flex and strengthen your financial muscles.

Bottom line

As the holidays quickly approach, it's a great time to get your money in order.

"Going on a financial cleanse can help you develop a better relationship with your money and foster saving habits. Going through a cleanse can help put you back in the driver's seat so you can take control of your finances," Willard says.

About the Author: Melanie Lockert is a freelance writer and event planner currently living in Los Angeles. She is the author of Dear Debt: A Story About Breaking Up With Debt. She has been featured on Oprah, Huffington Post, Business Insider, The Globe and Mail and more.

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