Summer often brings higher discretionary spending. A weekend trip to the beach, extra outings with friends or that must-have ice cream machine can quickly eat into your budget. But summer can also be an ideal time to build savings without making major lifestyle changes.
Because the holiday season is still months away, even small weekly contributions can add up over time. Whether you’re building a holiday fund, boosting your emergency savings or paying down debt, setting aside a little money each week can make a difference.
The goal of a summer savings challenge isn’t to eliminate fun. It’s about being intentional with a portion of your spending while still enjoying the season. Building your savings doesn’t have to be complicated. Follow these five steps to make the most of the summer months and put yourself in a stronger financial position by fall.
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Step 1: Choose a savings goal
Before you start saving, decide what success looks like. Giving every dollar a job can help you stay committed when summer spending temptations arise. Here are several ways you could use the money you save:
- Holiday spending fund: Use the summer to save up for your holiday spending. Knowing you have funds available can make it easier to buy holiday gifts or plan special celebrations.
- Emergency savings: Experts recommend having at least three months of living expenses in savings, though given the uncertain economy, having six months of expenses saved up may give you greater peace of mind.
- Credit card debt payoff: Consider using your summer savings to pay off some or all of your credit card debt. Once you’ve paid off that debt, you can continue to save the money that was going to your monthly credit card payments.
- Back-to-school expenses: If you have kids who will be heading to school or college in the fall, saving throughout the summer can make it easier to stock up on essential supplies.
- Travel fund: Consider adding your savings to your travel fund. You might use that money for family vacations, or save up for that once-in-a-lifetime trip that you’ve always wanted to take.
Once you’ve chosen a savings goal, make sure your money is working as hard as you are. Parking your funds in a high-yield savings account can help your balance grow faster.
Use the tool below, powered by Bankrate, to compare some of today’s top savings account options.
Step 2: Pause one recurring expense
Once you’ve identified your savings goal, look for an easy way to free up money in your budget.
Go through your bank account or credit card statements to see where your money is going each month. Chances are you’ll find at least one expense you can live without for a few months. Redirecting that money to savings can help you make steady progress toward your goal without dramatically changing your lifestyle.
You might be able to pause one of these common expenses:
- Streaming service
- Weekly takeout habit
- Convenience-store purchases
- Subscription box
- Daily coffee shop visits
- Food delivery orders
- Unused gym memberships or coaching subscriptions
- Impulse online shopping
Choose one realistic cutback that you can make temporarily while you focus on saving money.
Step 3: Redirect rewards and unexpected cash
(Image credit: Getty Images)
Cutting expenses isn’t the only way to save more money this summer. You can also accelerate your progress by redirecting unexpected cash and everyday perks into your savings account. Because this money isn’t part of your regular budget, you may be less likely to miss it. Consider whether you’ll receive any of these sources of extra cash this summer:
- Cashback rewards: It’s easy to treat cash-back rewards like free spending money. If you’re carrying credit card debt, consider applying those rewards directly to your balance to reduce interest charges. Otherwise, transfer the rewards to your savings account and put them toward your summer savings goal.
- Credit card statement credits: Statement credits can lower your monthly bill and free up cash in your budget. Rather than spending those savings elsewhere, transfer the equivalent amount into a high-yield savings account. If a credit creates a negative balance, your card issuer may allow you to request a refund check.
- Cell phone perks and discounts: Many wireless plans include free streaming subscriptions, discounted services or other perks. If you’re no longer paying for those benefits out of pocket, move the money you would have spent into savings instead.
- Rebates and loyalty rewards: Whether it’s a manufacturer rebate, store reward or loyalty-program payout, treat these bonuses as found money and deposit them directly into your savings account.
- Tax refunds or side-hustle income: Consider earmarking all or part of a tax refund, freelance income or earnings from a side gig for your savings goal. Since this money isn’t part of your regular paycheck, it can be easier to save without affecting your day-to-day budget.
Direct those perks and windfalls into the account you’re using for the summer savings challenge. Because the money never sits in your checking account, you’ll be less tempted to spend it. Over time, those extra dollars can add up faster than you might expect, and watching your balance grow can help keep you motivated.
Step 4: Automate your savings through Labor Day
Set a savings goal and decide how much you can realistically set aside from each paycheck throughout the summer. Then, schedule automatic transfers from your checking account to the account you’re using for the challenge. Setting those transfers to continue through Labor Day can help keep your savings on track.
Consider giving the account a name that reflects your goal, such as “Holiday Fund,” “Emergency Fund” or “Vacation Fund.” Seeing that name each time you check your balance can serve as a reminder of what you’re working toward and help keep you motivated.
Automating your savings removes the need to make a decision every payday. Instead of relying on willpower, you’ll build saving into your routine, making it easier to stay consistent and reach your goal.
|
Weekly Amount |
Approximate Savings by Thanksgiving* |
|
$10 |
$200-$250 |
|
$25 |
$500-$625 |
|
$50 |
$1,000-$1,250 |
|
$100 |
$2,000–$2,500 |
*Based on saving consistently from mid-summer through Thanksgiving.
Step 5: Track your progress and stay motivated
Staying motivated is often easier when you can see your progress. Consider using a budgeting app such as Monarch, Quicken Simplifi or YNAB to track your savings goal throughout the summer. If you prefer a low-tech approach, create a simple chart or tracker on paper and update it each week.
If you’re saving toward a shared goal, such as a vacation, holiday spending fund or emergency fund, check in regularly with your spouse or partner about your progress. Seeing your balance grow can reinforce positive habits and make it easier to stay committed to the challenge.
Remember, the goal isn’t to eliminate summer fun. It’s to be more intentional with your spending while consistently setting money aside for a larger financial goal. By Labor Day, those small weekly contributions could leave you with hundreds — or even thousands — of extra dollars heading into the fall.
A summer savings challenge doesn’t require a complete budget overhaul. Instead, focus on consistently setting aside even a small amount of money each week. Over time, those contributions can help reduce financial stress and put you in a stronger position heading into the fall and holiday season.
