As the summer holidays approach, many families face a significant financial squeeze, yet a finance expert suggests that adopting new habits now could help household budgets stretch considerably further during the warmer months.
This advice comes amid growing concerns about the escalating costs of household bills and the broader economic impact of the conflict in the Middle East, leaving many with less disposable income than they had initially hoped.
Chris Henderson, save and pay director at Tesco Bank, said: “As we look ahead to summer, many will be thinking about their social calendar and going on holiday.
“Sustaining an active social life can come with a cost, but it can be achieved with some healthy spending, budgeting and saving habits. Taking small steps now can make a world of difference and ensure you’re in a good financial position to enjoy the summer.”
Here are some suggestions from Mr Henderson for stretching summer budgets further:
1. Prioritise savings pots.
Splitting money across different pots can mean it takes longer to reach individual goals. It may be worth some people considering how urgently they need to achieve a particular goal and whether to prioritise a shorter-term one, such as a holiday, over another goal that is less “time sensitive”.
If someone has a long-term savings goal that is important to them, however, this may still take priority over shorter-term spending.
2. Consider selling items that are no longer needed.
Selling items through online platforms could be a good way to generate some extra money for summer holiday budgets.
3. Try out a budgeting “rule”.
To help stick to a budget, some people may consider aiming to set a percentage of their income to put aside for savings, while also factoring in the proportion they need to set aside to pay essential bills and a percentage to pay for non-essentials.
4. Try automating savings to help remove temptation.
Automatically transferring money directly into savings could help to avoid the temptation to spend it.
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5. Consider a “no spend” challenge.
Setting a challenge not to spend on discretionary purchases for a period of time could help some people to reach their savings goals faster. Cancelling subscriptions which are little used could also help to turbo-boost savings.