It’s June, which means summer has arrived, along with heat waves and longer days. But even if you’re burning up in the warm weather, you don’t have to burn through your cash to survive the summer.
To keep your financial cool, take some time to check in on your money and plan ahead for what’s next. It’s the perfect month to adjust your budget for the summer and revisit your financial resolutions (remember those?). The end of another school year means it’s also time for college students and graduates to plan out their next steps for their student loans.
Here are four money moves you can make in June to stay focused on improving your finances.
1. Budget for summer fun and child care
June is the time for summer vacations, evenings with your friends, and outings with your family. “I’m always tempted to blow my budget when summer rolls around — from dinners out on rooftop patios to spontaneous road trips with friends,” said Tori Dunlap, who offers personal finance and career advice at Victori Media.
Resist the temptation of carefree spending, however. Failing to plan for these costs means you’ll pay for them later. If you budget for them instead, you can have summer fun that’s affordable and guilt-free.
“Starting to save in June for the rest of your summer outings is key to making sure you don’t overspend,” Dunlap said. “Think in terms of saving now for an adventure later — you’re not depriving yourself; you’re just gifting future you some awesome summer nights!”
Parents with young children probably will face the additional task of paying for more child care now that school is out. Finding an affordable summer camp or babysitter is a good start. But you also should review your budget and consider where you need to cut back to cover these extra costs.
2. Revisit your 2018 financial resolutions
With the year halfway done, it’s the perfect time to revisit your financial resolutions for the year — even if that means coming to terms with missed opportunities or money mistakes you’ve made so far.
“If you blew your 2018 money goals way back in February, it’s not a lost cause,” Dunlap said. “Getting good with money, like anything else, is a step-by-step process. There is still plenty of time to make good financial decisions and strides towards your goals.”
Take time to think through your goal-setting process and find the lessons there, Dunlap suggested. Consider why you didn’t stick to your financial goals. Were they unrealistic, or did you need a better plan in place to execute them? Re-evaluating your resolutions can help you see what you can do to get past obstacles and make financial progress.
Armed with these insights, set a money resolution for the rest of 2018. “Pick one or two major things to focus this summer on,” Dunlap suggested, such as finding a new financial resource or improving your budget. Limit yourself to just one money priority to keep yourself motivated and focused on improving your finances.
3. New grads: Make a plan for your student loans
If you recently donned a cap and gown and received a college diploma, congratulations! Now, start thinking about your student loans and how you’ll repay them.
“You’re more responsible for your own finances now than ever before,” said Ann House, an Accredited Financial Counselor and director of the Personal Money Management Center at the University of Utah. “It’s important to create a budget that not only works for your starting salary but takes upcoming student loan payments into consideration as well.”
Don’t worry — there’s still time for college graduates to get their finances in order. Federal student loans have a six-month grace period after graduation before repayment begins.
Spend this time finding all your student loans, setting up payments, and working out a student loan contingency plan. If you don’t find a job right away, don’t panic. “Work with your servicer to find the repayment option you can qualify for,” House said. You might be able to temporarily pause or lower your student loan payments if you plan ahead.
Lastly, consider paying off your student loans ahead of schedule. “You will save interest and free up money in your budget sooner,” House pointed out. Use our student loan prepayment calculator to see how extra payments could help you get out of debt faster.
4. Current college students: Take stock of your student debt
“At the end of your spring semester, [review] the amount of debt you are taking on and what the minimum payment will be” on your loans so far, House advised. That will give you a chance to make sure you’re not borrowing too much.
“Think about the industry you plan to enter after graduation, as well as your desired lifestyle, to evaluate if you can afford that payment,” House suggested. Generally, your student loan payments are affordable if they’re 8% or less than your monthly income.
Start looking into student aid options for this fall. In particular, pay attention to the federal limits on student loans. When college costs are higher than these limits, you need to look for other options to pay for college. By looking ahead, you’ll have time to research other borrowing options, such as Parent PLUS Loans and private student loans.
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