Financial Health

Summer Savings - Setting Goals and Sticking to a Plan

Most summers Lauren Parkinson, and her husband, Scott, fill up their hours away from work with travel, concerts and other adventures that make the season what it is: The time to get out and have fun.

But this year, their plans are a bit different.

Plenty of amusements are still in the offing, but the couple is trying to stay focused on growing their newly opened savings account.

“We’re definitely at a point in our lives where we feel that’s really important,” said Parkinson, 28, who grew up in Oklahoma, and has been in Salt Lake City for two years. “With summer I think you always want to go on vacation and do all the fun things there are to do, but we’re trying to tone that down as much as possible.”

Seattle-based financial planner Levi Sanchez, founder of the firm Millennial Wealth, says the Parkinsons are smart to be thinking about their future and with a set goal the couple should be able to stay on track, even when the pull of summer spending is strong.

“I’d say goal setting is extremely important. It forces us to think about what we really want to accomplish and why,” Sanchez said. “Goals can be extremely powerful when written down and seen on a day to day basis as a reminder.”

Sanchez’s recommendations for meeting savings goals start with gathering one important piece of information: Know your cash flow. Understanding what comes in and goes out each month in terms of income and spending helps set that savings goal.

From there he says, try automating regular deposits into a savings and/or an investment account, which forces progress toward the financial goal.

Not a fan of traditional budgeting, Sanchez said automated deposits help achieve the same results.

“Budgeting can be helpful if focused on the right things,” he says, “such as asking yourself, am I spending money on things that actually add value to my life.”

For the Parkinsons, saving for the future has been complicated by a degree of career instability. As a professional soccer coach, Scott Parkinson works on time-limited contracts that led the couple to move nine times in their 10 years together. And that meant his wife’s career as a digital medical specialist has had its ups and downs.

In most cases any savings gains, including extra income from side hustle contract work she’s done, has been sucked away by the expenses of moving.

With another round of changes coming in 2020, Lauren Parkinson said it was time to dig in on a saving plan.

“Saving can be hard for people who have fluctuating incomes because it makes it harder to automate savings,” Sanchez said. “Instead, focus on setting aside large chunks of income, or a percentage of that income, when it does come in.”

Lauren Parkinson was able to do that in July thanks to an unexpected work bonus of $1,000. The next step, she said, is to continue to seed the account with a slice out of each new paycheck.

“We want to get several thousand dollars in the bank by the end of the year and summer is a big chunk of that,” she said.

To get there, the couple is looking to trim their expenses by using cash instead of credit cards, making smaller summer vacation plans and skipping some more expensive experiences, like concerts or fancy restaurant meals.

“In years past, you know, I’d get really distracted (from saving) and just wanted to have right now. I also suffered from some FOM – fear of missing out,” Lauren Parkinson said. “But now I feel pretty optimistic that I’ll be able to stick to a plan.”