7.5.2010These are the early days of May, and the busiest holiday and celebration season is still ahead of us. Indeed, this is a good time to grab a pen, paper and a calculator and think how you are going to finance the extra summer expenses.
The Finnish summer may be short, but everyone will surely have plenty of time for many exciting visits and events. These delightful moments will give you even more pleasure if you don't have to worry all the time how you are going to pay for them. If you have young children or teenagers, it may be a good idea to have a family meeting and involve them in the planning. You see, this is an excellent opportunity to teach your offspring to deal with their finances.
First, you should draft the budget as usual
Start by adding all your income: salaries or pensions, child benefits and other possible income. Don't forget to include holiday bonuses; for most of us, they are 50% of the salary received during the holiday. Some employers pay the salary and holiday bonuses beforehand for the entire holiday. For example, if you start your holiday at Midsummer and continue it for four weeks, you may already get almost all of July's salary in June.
The bigger-than-normal salary may look nice on the account statement but you should remember two things. One, it will exceed the monthly income limit on your tax card, meaning that more taxes will be withheld from the salary. Two, in July you will only get salary for the days you are not on holiday. That is why it is important to use money sensibly and budget your income so that you can also pay bills and other necessities in July.
When you have added your income together, deduct your regular expenses, such as housing maintenance charge or rent, loan servicing costs, electric bill, telephone bill, insurance, other bills falling due in the summer and normal food expenses, from the income.
Go through your summer holiday plans
Are you planning to spend the holidays at home, at the summer cottage or somewhere else? Have you been planning a trip abroad? Did you already pay some of the travel expenses when you booked the trip or will you pay everything at the destination? Are you going to visit an amusement park, a zoo, a music festival, an opera festival or other summer events? For example, when a family of four goes to an amusement park, the wristbands alone will easily cost 130 euros. When food and drink are added to this, the day's total sum is suddenly a lot higher.
Summer agenda
Besides trips, there are often weddings, confirmation parties and other celebrations on the summer agenda. Especially at a certain phase of life, you may be invited to as many as three weddings during one summer. This could well prove to be a money pit, as many people want to look their best at weddings, the party may be halfway across Finland, you may have to sleep in a hotel and the gift will, of course, cost something, too.
Even if you don't have these kinds of parties to go to, you may have invited guests to your summer cottage, for example. Catering for a large group of people eats up surprisingly much money even if the guests bring some food and beverages with them. For some Finns, Midsummer is a holiday comparable to Christmas, packed with food, and they want to invest money in it. All this should be included in the budget.
When it comes to food, calculate the regular food expenses but don't forget to leave room for the summer delicacies: peas, strawberries and ice cream cones. Markets may have market prices, but the atmosphere and quality is often quite different from supermarkets.
Now your budget should be ready
Check your grand total: is it positive or negative? If it's negative, could you perhaps cut something off or spread the summer expenses across a longer time period? Some suitable options could be a credit card or a FlexiPayment facility in your housing loan.
When you estimate your expenses accurately and make a plan for paying for them, it's easier for you to keep your finances balanced – and allow yourself to loosen up in the summer.
Anu Numminen
Private Economist
