With summer right around the corner, you might be thinking about travel plans, backyard barbecues, and spending time with friends and family. Summer feels like the vacation we’ve all earned after enduring colder, drearier months — and that can lead to us slacking off in a very important area: money.
It’s time to change your thinking. Summer can be the perfect time to tackle some of your financial goals. Here are some to consider working toward over the next few months.
1. Start an emergency fund
When disaster strikes, an emergency fund can protect you, your family, and your finances. This is money set aside for an unexpected but major expense like a job loss, medical bill, or costly car repair.
How much money should you have in your emergency fund? It can depend on a few factors, such as your lifestyle and income, but a good goal to strive for is typically three to six months’ worth of daily living expenses — or a year’s worth if you’re single or in a high-paying job.
You may not be able to build this entire fund overnight, but you can make some serious progress this summer. Set up automatic contributions from your paycheck into a savings account — a few hundred dollars a month is a great start. You’ll thank yourself if there’s ever a catastrophic financial emergency. (See also: 5-Minute Finance: Start an Emergency Fund)
2. Boost your bottom line
Most of us could use a little extra cash during the summer. Longer days and warmer weather may have you spending more time (and money) hosting cookouts, taking road trips, and hitting the town. Not to mention with the kids home from school for the next three months, the blow to your budget is imminent. How can you combat this inevitable cash crunch? Get a side hustle.
There are hundreds of ways you can earn money through a side gig. You could pick up a part-time shift at a restaurant, offer to baby-sit or pet sit, or even start your own blog or small business. Your options are endless.
Side hustle income can improve every single area of your finances. It can help you to pay off debt faster, save more, and give you a little extra room in your budget every month. (See also: 14 Best Side Jobs For Fast Cash)
3. Start saving more for retirement
While you’re lounging in the backyard hammock, take the moment of downtime as a perfect reminder of a major financial concern — retirement. Are you on the path to being able to retire when you are hoping to?
Set a goal this summer to catch up on your retirement contributions. Even contributing just one more percent of your income into your 401(k) will boost your savings goals with very little effort on your part. (See also: 7 Retirement Planning Steps Late Starters Must Make)
4. Track your spending
Everyone knows that budgeting can help people reach their financial goals, but many people still don’t bother to track their spending every month. Tracking your spending has traditionally been an arduous task, but with technology, it’s become much easier. Now you can use free apps, like Mint, that will automatically track your spending for you. You can set your budget for each category, and the app will tell you where you have overspent.
Take the time this summer to find a way to track your spending. Whether you like the tech route or you’re an old school Excel spreadsheet lover, it’s all about finding what works for you and sticking to it. (See also: Stop Using These 5 Excuses Not to Budget)
5. Pay off debt
While you might not be able to become entirely debt-free this summer, you can set a realistic goal of how much debt you would like to pay off.
Give yourself a starting day and a deadline. Take the total amount of your goal and divide it by three months to calculate how much you need to pay off per month. Then, take a look at your budget and figure out where you can come up with the additional cash. Do you need to cut some line items out entirely? When you set a goal and stick to it, you might be amazed at what you can accomplish this summer. (See also: 7 Easy First Steps to Paying Off Debt)