Summer in the UK is often filled with pleasant weather and a busy social calendar. Amidst the mirth and merriment, the sunny season also brings with it the pressures of budget planning to balance the costs of summer fun with essential spending and savings. Financial pressures are particularly apparent during the ongoing cost-of-living crisis. With a splash of creativity and some strategic planning, however, you can navigate this tricky terrain and have a ‘summer of fun’ without burning a hole in your pocket.
- Summertime brings financial worries for Brits amidst the cost-of-living crisis
- Virgin Money survey reveals a quarter of Brits are concerned about balancing essential spending with summer fun
- Women tend to struggle more with their summer budget than men
- Personal finance expert at Virgin Money suggests the 50:30:20 budgeting method
- Katy Simpson offers practical advice for each category of the budget: Essential spending, Fun, and Savings
Financial Worries Loom Large this Summer
In a recent survey conducted by Virgin Money involving 2,000 Brits, a striking 22% confessed apprehension about fitting essential spending and saving into their summer budget. The study further disclosed that 19% aspired to participate in more social activities than their finances would allow, with women (21%) expressing more concerns than men (16%). It’s hardly surprising, then, that making a summer budget work can often seem challenging, especially with 60% of Brits feeling the social pull more intensely during the sunny season.
Budget Planning the TikTok Way: The 50:30:20 Method
To help Brits strike a balance between fun and finance, Katy Simpson, personal finance expert at Virgin Money, suggests following the trending 50:30:20 budgeting method. This financial framework encourages individuals to divide their income into three categories: essential spending (50%), non-essentials (30%), and savings (20%). By following this simple budgeting strategy over the summer, you can enjoy the season to the fullest without compromising your financial responsibility, or increasing your debts with buy now, pay later schemes.
|50% of income for bills, direct debits, food
|30% of income for eating out, style and beauty
|20% of income put aside
Tackling the Essentials
Before you start planning your summer adventures, Katy advises to first consider essential spending and any financial commitments or saving goals. As she points out, “If the essentials are consuming more than 50% of your budget, it’s worth identifying any unnecessary expenditure that could be reduced. For instance, is that gym membership or streaming subscription really worth its cost?” It’s also a smart move to review essential bills like phone contracts, broadband, or insurance, to check for potential savings.
Allocating Funds for Fun
Making your money stretch further for social activities can be a bit of a puzzle. Katy suggests being open about your finances with friends and family, setting boundaries and learning to say ‘no’ when necessary. She also recommends swapping high-cost outings for low-cost or free alternatives like park picnics, home BBQs, or local explorations. This way, you can still enjoy quality time with your loved ones and bolster your savings.
The final part of the budget is reserved for savings. Katy advocates for regular saving, no matter how small the amount. Aiming to deposit 20% of your income into a savings account each month is ideal, but if it’s not achievable, it’s better to save little and often. This helps to maintain a healthy financial cushion as we head towards winter.
While the 50:30:20 method offers a universal approach to money management due to its percentage-based allocation, Katy recognises that it may not be a one-size-fits-all solution. She concludes, “Some may find that their spending is more like 70:20:10, so it’s not important to follow the method to the letter, it’s a good guide to help Brits split their income and manage their money effectively.” By embracing a flexible approach to this method, you can optimise your summer enjoyment without compromising your financial commitments.