Here Are 7 Reasons Why Summer Holidays Are the Ideal Time for Financial Planning

I met with two new clients recently. As we got to know each other, a familiar frustration arose when they said something a long the lines of

“We just never have the time to think about these questions, Tom.” 

They’re right. Life is busier now than ever. Even with new technologies that speed up tasks, according to historian Richard Rabil, we now work about 160 hours a year more than our ancestors. 

In the Middle Ages, it was less clear when work ended and other activities began. But today, despite clearer distinctions, we still struggle to find time for “the big stuff”. 

While we theoretically have more defined work vs leisure time, we still don’t have time to ask ourselves: What type of future are we working towards? When do we want or need to plan for retirement? Do we want to wind down our working responsibilities to have a bit more free time?

Summer holidays are often synonymous with relaxation, travel, and spending quality time with loved ones. While it’s time to unwind and recharge, it also presents an excellent opportunity to review and improve your financial plans.

With a bit of extra downtime, you can reflect on your financial goals and lay a solid foundation for the rest of the year.

Here are several considerations to bring to future discussions with your financial planning team:

1. Reflect on the Year So Far

Mid-year is a natural checkpoint for assessing your financial progress. Take advantage of your holiday time to review your financial goals. Not the entire summer, but just now and then, when you’ve ended up by yourself at the pool jot a few thoughts down in a notepad.

I’ve just found the notepad I took to Costa Rica in 2022. It’s really interesting to see how my thoughts have evolved. 

So, in between poolside cocktails, take out your notebook and reflect on how on track you are with your savings. How have your investments performed? Were there any unexpected expenses? 

Identifying areas for improvement can help you adjust your plans accordingly.

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2. Set Mid-Year Financial Goals

The midpoint of the year is perfect for setting or revising financial goals. 

While relaxing at the seaside, think about your objectives. Are you saving for a major purchase, paying off debt, or planning a winter getaway? 

Outline your goals and set a realistic timeline for achieving them. Setting clear goals during your holiday can motivate you to stay focused and disciplined throughout the rest of the year.

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3. Budget for Summer Activities

Summer can be an expensive season with travel, entertainment, and lots of socialising. A summer budget can help you manage your expenses and avoid financial stress during this period. 

Planning your spending in advance ensures you can enjoy your holidays without overspending, and it sets a positive example for managing money throughout the year.

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4. Discuss Family Finances 

Summer holidays are great for family gatherings. At your next family BBQ, why not factor in an important financial discussion? 

Whether planning for a child’s education, caring for aging parents, or discussing inheritance matters, these conversations can help ensure everyone is on the same page and contribute to better financial planning. 

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5. Prepare for End-of-Year Taxes

While taxes might not be top of mind in summer, preparing early can save you stress later. 

Between tending to the garden, take the time to organise your financial documents, review your tax situation, and consider meeting with a tax professional to discuss any changes that could affect your return. 

Early preparation can help you avoid last-minute rushes and ensure you take advantage of all available deductions.

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6. Evaluate Your Emergency Fund

The uncertainties of life underscore the importance of a robust emergency fund. 

Use your holiday time to evaluate your current savings and determine if it’s sufficient to cover unexpected expenses. 

Aim to have at least three to six months' worth of living expenses saved up.

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7. Give Back

Summer is also a time for reflection and reciprocity. Consider how charitable contributions can fit into your financial plan. 

Giving back creates a positive impact and can also offer tax benefits. 

Plan your charitable donations wisely to support causes you care about while benefitting your financial health. Donate often, donate small and consider where you can have the most impact.

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