From shelling out thousands of dollars for a trip abroad to breaking the bank to pay for summer camp, the next few months can derail smart spending habits in more ways than one. Although everyone deserves some R&R, making the most out of the warmer weather doesn’t have to set you back financially.
The following money moves can help you get ready for an enjoyable summer without placing too much strain on your wallet.
Plan a “staycation”
The average price tag of a weeklong vacation in the Caribbean for a family of four is over $7,000, according to TripAdvisor. Although it might not cost you as much in the summer due to less demand, you’ll still dish out plenty. Instead, consider a “staycation.”
“If you’ve had unexpected bills since the start of the year, or just haven’t been that diligent about sticking to the budget, cutting back on vacation expenses can be one way of righting the ship,” says Carrie Houchins-Witt, a financial advisor in Coralville, Iowa.
“There are many affordable options right outside your door that won’t break the budget,” she says. “Stay at home and visit all of the museums, parks, and attractions in or near your hometown.”
Invest in your health
Going for a walk last winter was simply out of the question for many Americans because of snow, ice and cold. Even hitting the gym may have seemed like a tall order.
But now that you won’t get stung by a harsh wind the second you go outside, consider taking daily strolls through your neighborhood. Walking can go a long way in improving your health and, over time, can help reduce medical costs.
“If you made a New Year’s resolution to lose weight or become more fit, this is a good time to think about getting back on track,” says Celia Brugge, a financial advisor in Memphis, Tennessee. “With nice weather this time of year, it’s easy to find ways to be physically active.”
Once you’ve shaken off the rust, consider ramping up the intensity of your activities or workout by incorporating more demanding exercises into your routine.
Use your flexible spending account
To lock in at least a few hours of peace and quiet every day, you might jump at the opportunity to send your children to summer camp. But before you whip out your credit card, keep in mind that a dependent care flexible spending account, or FSA, could cover some of those costs.
“Parents should remember that they can use their FSA through their employer to fund summer camps with pretax dollars,” Houchins-Witt says. Employers can divert as much as $5,000 of your pretax earnings into a dependent care FSA, according to federal tax rules.
To use FSA funds this way, children must be under age 13 and parents must be working, looking for work or in school during the hours that their children are in camp, says Houchins-Witt. While day camps are eligible for the dependent care credit, overnight camps generally aren’t. Consider checking with a tax advisor to confirm which child care expenses qualify for tax breaks.
Add to your home’s value
Sometimes, spending money is in your best interest. Certain additions and improvements to your home can be great long-term investments, and now is a great time to complete those projects. A new wooden deck, for instance, can recoup up to 80% of its original cost in a subsequent sale, according to Remodeling magazine. Other improvements can even be deducted from next year’s taxes.
“Tax credits related to energy efficient products, including certain new doors, new windows, and adding insulation can help reduce the final cost to the homeowner,” Houchins-Witt says.
Solar energy systems, she says, are becoming increasingly popular and qualify for a federal tax credit of up to 30% of the installation costs.
The bottom line
Although the weather may be ideal for kicking back and unwinding, you may not want to be too nonchalant about some habits like exercising and spending. These tips can help ensure that you’ll stay healthy and won’t have to take the rest of 2015 to dig your way out of debt.
Tony Armstrong is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @tonystrongarm and on Google+.
Image via iStock.
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