No matter what city you live in, COVID-19 restrictions are slowly lifting. While great news, it’s still essential to be mindful of how re-openings may impact your summer budget.
Do any of the following statements sound familiar?
- You’re itching to build up travel credit card points.
- Many of your friends or family members are going on lavish (or just any) vacations.
- You have a sense of being stuck at home and a desire to make up for the lost time.
You want to balance your excitement for a return to “normal” and enjoying the summer months, all while not being too carefree with your budget. How can you find a happy medium?
Plan Your Summer Getaways (and Summer Budget)
With summer fast approaching and life getting back to “normal,” you may be thinking about your potential summer plans.
Before anything is set in stone, booked, or paid for, make sure that you map out the following:
- Where do you want to go?
- How long will the trip be?
- Who do you want to visit (if anyone)?
- What experiences do you want to have while on this trip?
- How much will everything cost?
These are the types of conversations that are best to do openly with your spouse and potentially children to ensure everyone is on the same page. You actively avoid spending spontaneously (and going overboard) outside of your budget by making a plan.
Even though it may take more time, it is also essential to research the best flights and travel arrangements.
- Will leaving Monday morning reduce the flight by $200?
- Is an Airbnb actually more expensive than a hotel?
- What type of transportation, if any, will you need? Supply and demand for rental cars are a bit wonky; just look at Hawaii. During COVID-19, rental car companies sold off a majority of their fleets to stay afloat. Once it reopened to the public, tourists were shocked at the $1,000 a day sticker price, turning to alternatives like U-haul trucks to beat the demand.
With everything opening back up and demand going through the roof, prices may start skyrocketing. Try your best to find deals when you can, and make sure to look into every available option—you may be surprised by how much you can save.
Budgeting For What You Value Most In Life
Life is fleeting and precious, two elements that COVID-19 has taught us over the past year and a half. Such thoughts have prompted many people to re-think their priorities—both financial and personal.
We recommend aligning your values and goals with your spending. Doing so makes your actions more intentional and allows for a more fulfilled life.
How can you better align your money with your life? Consider the following:
- Reinstate date night
- Go out to your favorite restaurant
- See a movie or a play
- Attend a sporting event with your children
- Spend more time with family by creating fun experiences
Spending money on what you value brings more intention and purpose to every dollar.
Evaluate Your Cash Flow Throughout The Year
Perhaps your spending priorities have changed. Remember, change is not a bad thing, but it’s wise to update your current cash flow plan to reflect your new lease on life.
Your financial plan was never meant to be rigid; it should evolve with you. Take some time to refresh your annual cash flow plan to represent your “new normal.”
After missing out on family gatherings, maybe you want to be more intentional this year and travel for grandma’s birthday or your niece’s graduation. You might want to host your in-laws for some time or travel for a friend’s weekend. You may even want to move to a different place entirely!
Your travel plans are important and valuable, but you want to make sure that you plan for the corresponding spending ahead of time.
Address the key questions that focus on your immediate spending goals and also align with your long-term financial goals:
- How have your goals changed, and by how much?
- An extra vacation is different from an out-of-state move. Determine how your goals have shifted and why.
- What are the financial costs for such a change?
- Retiring earlier or engaging in a more significant purchase may require you and your planner to take another look at the numbers and devise a strategy to help you reach your goal.
- Are you still able to save enough for your long-term goals?
- Does buying a beach condo in Florida jeopardize your retirement savings?
By answering these questions and making a full-year cash flow plan, you will have more confidence, clarity, and fun as you engage in new activities.
Have Fun, Stay Safe, And Maybe Spend A Little Money
Quarantine has been rough. Of that, there is no doubt.
Take some time to enjoy being with family, friends, and loved ones again. You deserve it!
We urge you to truly enjoy the reopening as it happens in your city and as much as you feel comfortable. We just also politely nudge you to keep an eye on the dollars and cents.
It can be easy to let the euphoria get the best of you and your wallet. By planning ahead and being thoughtful, we know that you can find the right balance.
While budgeting is not always a fun topic, it is a critical one. At Columbus Street, we like to think about budgeting in terms of “cash flow management.” By better understanding your cash flow, you can better align your resources with your values.
Your values and goals are worth investing in, and we can help you make a plan that works for you short and long-term. Schedule a call with us today to learn more.