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Neal Frankle
I’m Neal Frankle, Certified Financial Planner™. Credit problems are a serious business. In fact they changed my entire family life when I was 16. This site is here to help you repair your credit without getting ripped off. Read my story.
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How the Good Old Summertime Can Hurt Your Credit

by Neal Frankle, CFP®

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Just a guess, but the good old summertime might be, on balance, the favorite season of most people. It brings warm weather, backyard barbecues, more time with family and friends, weekend getaways, summer vacations – what’s not to love? Well, if you aren’t careful – and some people are not when the warm weather hits – you can hurt your credit.

After all, summer is a time of warm weather, easy living, and good times. And while we all need that for a season, it can wreak havoc with other areas of life – credit being one of them. This is especially true if your credit situation is tight already. Summer living could cause you to step into the credit danger zone. It happens when you’re having fun. And it can cause credit and debt problems that will haunt you when summertime is long over.

How does that play out? Very subtly.

High Vacation and Travel Expenses

For many people, summer is when they take that annual excursion to someplace special. It could be the beach, a theme park, or even a foreign country. But whatever it is, there is almost always a significant cost attached to it.

According to American Express, 195.9 million Americans plan to travel this summer at an average cost of $941. For a family of four, that’s almost $4,000.

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If you haven’t budgeted money for your summer vacation during the rest of the year, it could seriously pinch your finances. A single vacation excursion could cause you to turn to plastic to pay for it, to say nothing of what two or more vacations will do.

The bottom line is that by the time summer is over, you may find yourself carrying thousands of dollars more in debt than you had when the season started.

Warm Weather Causing You to Spend More than Usual

Taking summer vacation isn’t the only extra outlay you may have during the summer months. You may also decide to take a couple of weekend trips. Or you may host two or three backyard gatherings that involve generous amounts of food and liquor for a large number of people.

You might also go to fairs, festivals, and concerts, where your resistance to spending extra money will be low. These events tend to be more common during the summer months, and they can be perfect outings on a warm summer day or evening.

But each of these expenses can hurt your budget, especially if you have not set extra money aside to cover them. It’s not that any one of them can do much damage, but a combination of several can really add up. Again, if you’re using credit cards to make up the difference, you could end up with much higher balances by the end of the season.

A More Casual Attitude Toward Everything – Including Paying Your Bills

Warm weather seems to have a tranquilizing effect on the human psyche. We can become less serious about everything, and even adopt a casual attitude. That attitude can spill over to paying bills. And that can have a negative effect on your credit.

It can happen almost innocently. You forget to pay a couple of bills because you’re busy having fun. It may be that the due dates fall when you are on vacation. It may also be that a couple of bills fell through the cracks while you were planning a backyard party. And sometimes, not so innocently, you might let a payment or two go simply because you do not have the money to pay them, with everything else that’s going on during the season.

However it plays out, two or three late payments showing up on your credit report can drop your credit score more than you think. And when it does, you may find yourself paying more for a lot of things.

A Seasonal Slowdown in Income

There are some businesses, industries, and jobs that experience seasonal slowdowns in income during the summer months. It’s even been said that “what’s good for the weather can be bad for business”, and that may be true in your line of work.

It could result in a loss of income for a business owner. For employees, it can cause reductions in overtime or bonus income. And sometimes it can even lead to reduced hours, as the employer attempts to cut spending during the slow summer season.

It’s even possible that you may lose your intensity about your work during the summer months, which will result in lower business income, commissions, bonuses or overtime.

And it should go without saying that the combination of higher expenses and lower income can be a certified budget buster. The combination can than have a real negative impact on your credit situation.

Your Commitment to a Debt Elimination Plan May Go Soft

Given all that we’ve discussed so far, it is entirely possible that a debt elimination plan that may have been going well during fall, winter and spring, might get off track during the summer season. It could lead to either reducing or suspending debt elimination efforts.

Though it may be okay to take a break with your plan for season, it’s important to guard against the development of bad habits. For example, you certainly don’t want to abandon a debt elimination plan. But that is entirely possible if you stop making additional debt payments for even a few months.

Any major financial effort, whether it is to save money, invest money, or pay off debt, requires a consistent effort over a long period of time. And since paying off debt is not necessarily a pleasant task, it may be easier to get knocked off of your game plan than you think.

Guarding Against Credit Disaster in the Summertime

Advanced planning is obviously the best course of action. But if you haven’t done that, be sure that you are careful to spend within your limits, and not to take on additional debt to pay for the good times. Also be very aware of your obligations, knowing that it’s easier to let them go during summer than just about any other time.

Though we may have a natural tendency to slow down and enjoy life during the summer, financial responsibilities continue as normal. Enjoy your summer, but do your best to strike a workable balance as you do.

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