If you’re a parent, summertime can mean trips to the beach (along with parking fees, ice cream runs, boardwalk arcade games, funnel cakes, cotton candy, gaily painted hermit crabs, etc.), setting up camp on some far-away stunning vista (and all the must-have sundries and amenities) and, of course, hours of mindless -- not necessarily inexpensive -- entertainment. If you’re not vigilant, you may discover that your bank account has withered like an un-watered rose in the summer sun.
According to the New York Times, the average cost of summer (per child) is $601. With households earning more than $100,000 a year, the spending increases to nearly double that amount. Because most of your summer expenditures are made in relative proximity to the time to shop for your little debt machine’s return to school, it’s critical to get your budget right (albeit it a munchkin buzz-kill), and stick to it.
If you’ve already planned (and most likely laid out the dough) for a big thing this summer -- say a rental house in the mountains or at the beach, sleep-away camp, a family vacation (hopefully not of the National Lampoon variety) -- you’ve already gotten up-close and personal with the concept of generous summer expenditures. The average cost is $1,180 per person for a family vacation.
But the problem isn’t just the big expenditures. Take a moment to reflect upon your child’s predilections. What they naturally are inclined to do during weekends (when school’s in session) are the things that can eat you alive financially if you’re not careful. Will there be lots of trips to see friends or pursue hobbies? Do they play (and are obsessed with) video games? Are they addicted to apps that nickel and dime the pleasure principle? Do they have a sport that involves (or requires) extra training or a coach?
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Whatever it is, the seeds of your financial destruction are sown there, because the weekend is now seven days a week. So, here are some common gaps in summer planning where your dollars can go walkabout.
Obviously if you’re planning a family excursion to Europe, an Alaskan cruise to gawk at killer whales, or a road-trip to the Grand Canyon, there will be travel expenses. However, if you can afford those trips, no doubt you are already reasonably high on the financial curve and you’re not terribly worried about the associated costs of summer.
However, for most people the little things count. Kids need to see friends. They have activities. You may like to go to the beach. Many of these trips will involve tolls, gas and parking. Do you have a clue as to how much you’re spending?
When planning for summer expenses, get a baseline for how much your travel will increase, and budget for it.
As fewer telecom providers are offering unlimited data plans, experts are predicting that these lovely low-cost enticements into the land of the smartphone will soon go the way of the dodo bird. If your child uses a smartphone, check their data usage because it could well go crazy. If you don’t want to set physical limits, consider usage controls.
While day camp may be tax deductible as dependent child care, you will incur extra expenses in the form of new bathing suits, camp clothes, sunscreen, meal plans, snacks, and, of course, travel.
The same applies to sleep-away camp, except there’s no dependent child care deduction, and you have the additional costs of more travel to far-away places, hotels, roadside food and usually longer checklists of things needed for your little camper’s one- or two-week adventure into the world without mom and dad.
You already know it is tax deductible, but did you budget for daycare? There are many options, but even if you find a free program, you’ll still have the associated expenses of getting your child to and from there every day. Take time to poke around, and find the plan that works best for you.
Whether it’s a smartphone, movies (3D or IMAX), games, digital media (music, TV shows, more movies), concerts, laser tag, paintball, sports training, musical instrument instruction or any of the other diversions required to keep kids engaged and out of harm’s way, it can get pretty expensive out there. The advice here is simple, but crucial to your financial and mental well-being: Give yourself and your child a budget and then stick to it.
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Overspending can have a long-term impact on your family’s finances, from lost saving opportunities to an impact on your credit score. Credit utilization (the amount of debt on your revolving accounts compared to your limits) is a major factor in your credit scores, so if you’re planning on using credit cards for some of these summer expenses, make sure you’re not damaging your credit in the process. You can see where your credit scores stand, and whether your utilization is hurting your scores, for free on Credit.com.
While an expensive sleep-away camp or family trip just might cramp your style later in the year, it’s not necessarily what gets most families in trouble. When it comes to the financial death of a thousand “you-never-let-me-have-anything-I-want(s),” all you really need to do is start sweating the small stuff. If you do, you just might be able to keep those sweet little Dr. No’s from flinging you in a financial inferno.
Adam Levin is chairman and co-founder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.