FIVE WAYS TO GET YOUR FINANCES BACK ON TRACK AFTER SUMMER SPENDING

For those of who spent a little more than planned over the summer, it's important to review your financial situation to get yourself back on track.

Whether you managed to get away abroad – or ‘staycayed’, day-tripped and enjoyed evenings out, now that we can again - the summer months can be a costly time for many. In fact, holidays, along with sporting events and the lifting of COVID-19 restrictions in England, saw consumer spending soar to almost 12% more than pre-COVID levels in July. Needless to say, expenses can build up quickly, particularly if you have a family.

So, after a “summer splurge”, it’s important to take stock to how you to realign your finances – especially with the festive season just a couple of months away. Now’s the time to get straight and here are our top tips to do so.

1. Work out your current financial position Set some aside time to look through your bank statements to work out what you’ve spent over recent months and what you now need to do – or save – to get back on track.

2. Review your monthly budget Once you have an idea of your current financial situation, revisit your budget and decide how you are going to move forwards to manage it. Work out how you can cut spending on non-essentials - the food and drink brands you buy, memberships or subscriptions you don’t use, unnecessary seasonal purchases that can still be returned, any nights out that can become nights in?

The 50:30:20 rule is an effective way to manage your money and get back on top of any short-term summer overspends.

It works by spending half of your monthly income on necessities such as food, rent or mortgage, transport and other essentials. 30% is then allocated towards the things you want, and 20% goes towards savings or paying off debt.

But, depending on your financial situation after a summer splurge, you should look to decrease the 30% of wants and reallocate it towards savings until you’re confident that you’ve recovered what you overspent.

3. Leave your debit and credit cards at home when you go out Instead, sign up for a pre-paid card that lets you load on what you have left to spend – whether it’s 30% or less. It can be used in exactly the same places that credit or debit cards are accepted. They’re a great option when retraining yourself to spend responsibly.

4. If you’re tempted to splash out on a post-summer non-essential, work out how many hours it would take you to earn that money Ask yourself, is it really worth it? Do you actually need it? Would the money be better off left in your bank account to cover some of your extra summer spends or to put towards the cost of Christmas?