Summer starts in just 5 days and if you’re anything like me, you’re very excited for this time of year.  In my life, summer involves spending time by the pool, BBQs with friends and family and basically spending as much time outside as I possibly can. 

It also often means new projects on my home, planning for vacations and dreaming up what the rest of my year entails (my new years resolutions often get pushed back until after the end of tax season). 

If you’re anything like me, sometimes summertime can also mean crunch time for your finances.  All the items that I look to do and dream about cost money, and sometimes it feels like planning for those expenses can really put a damper on that summer fun.  To avoid that dread this year, I wanted to take this month to provide you with the 5 simple tips I find most helpful to plan for a financially expensive summer (and really, to plan for any expenses throughout the entire year).

Enjoy! And as always, if you have any questions or if something strikes you that you’d like more information on, please let me know.  


5 Tips for Planning for Large Purchases


1. Review the “Ins and Outs”

Before deciding what to purchase and when to purchase it, it is important to know what you can afford.  This starts by taking a deeper dive into your finances.  For most people, this can be as simple as looking into your one bank account or monthly statements. 

To start, choose a time frame.  This could be daily, weekly, annually, or most commonly, monthly.  Compile information on what is coming in (income from any and all sources) and then do the same for what is going out (bills, cash withdrawals, purchases, etc.). 

By starting to get an understanding of what comes in and what goes out, you are learning more and more about what can be a ‘large purchase’ for you, or the multiple purchases that can be made.  For some, a large purchase could be a shopping spree for some new clothing, for others, a pool or a second home could be more in line with what your goals (and budget) are.  Either way, figuring out what you can realistically afford in the moment is a great place to start in making sure that you are comfortable with your decision to spend the money.

2. Determine your Discretionary Income

Along the process of looking at those ins and outs, trends will start to form.  Hopefully, you’re in the position where this trend looks like excess money coming in, above and beyond what is consistently going out.  If this is the case, that means you’ve ended up with discretionary income, simply defined as “income remaining after deduction of taxes, other mandatory charges, and expenditure on necessary items.”  

With this knowledge, you are starting to form a better idea of what is left to spend.  The next step is to breakout this leftover income into what you are interested in spending it on.  Some options are your savings and / or investments.  This is also the money left over which can be allocated to the purchases you want to make.

If you end up with a negative trend, it is important to look into this further.  Look to step 5 where I explain how best to get help with this process.  Working with an advisor could help change your relationship with your finances and help achieve your goals even if it doesn’t feel like you’re capable of it right now.

3. List the Purchases

It’s time to decide!  Make your list of everything that you want to do.  This can involve the little things, all the way up through the big things (clothing, travel, furniture, yard work, etc.)  Everyone’s list will be different. 

After listing out everything, start to prioritize based on your financial review.  If you had minimal discretionary income, maybe this isn’t the year for to buy the second home, but a quick shopping spree to your favorite store is in order.  If you have a large balance left, then it may be time for some of those loftier goals that you’ve put aside each year. 

This is also the time to get those quotes, determine your spending range and determine what each of your goals will cost.  Planning for a big purchases, not only for this year, but for next year adds to the fun!

4. Review your Resources

After working out the facts and figures for your purchases, determining how the money is going to get spent comes next.  Resources come in many shapes and sizes.  Sometimes they involve opening a new ‘fun money’ bank account to save up those pennies until the expense is going to occur, while other times, it looks like finding a company to do home improvements who allow payments interest free over the next 12 months.  It could even look like knowing your Q3 bonus or next overtime check is going to be put right towards the trip you just planned so you don’t need to take on any credit card debt.

After doing all of the hard work, this part should come a bit easier than before.  Since you are aware now of the excess income each month and even a bit more aware of the expenses that you have each month, planning out how to make your new purchase should start to show itself in your review.

5. Get Help

Whatever your method, expense amount or future goals are, getting help can be essential to the process.  If any of the above steps make your head start to spin, or even if you just are looking for an outside perspective, spending some time working with a financial advisor, such as myself, can be essential to your success. 

Financially planning for your future can be an excellent resource to allow you to improve and even excel when it comes to your finances.  It can help you to make sure you are financially sound (without necessarily needing money to invest to be able to do so), while also helping you to figure out your goals and the areas of importance to focus on in your financial life.  You can work on your cash flows (the ins and outs), budgets for your present day and even forecasts for your future, retirement, large purchases, and goals. 

If you want more information or guidance on choosing and working with a financial advisor or planner, please let me know!  I am happy to schedule a complimentary consultation to discuss any questions or concerns you may have. 


Wishing you good luck and enjoyment in your summertime fun and spending!

Thank you, as always, for your time.