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9 tips for a financially sane summer

Overspending sends the wrong message to your kids

9 tips for a financially sane summer

Parents, the green season is upon us. Summer. And the "green" doesn't just stand for the leafy trees kids climb and the lawns through which they chase fireflies. It stands for cold hard cash. Kids cost money all year long, of course, but summer brings with it a slew of extra expenses: summer childcare programs, summer camps, extravagant family vacations.

According to financial counselor and bestselling author Eric Tyson, if parents aren't careful, they can easily find themselves living a summer lifestyle they really can't afford.

"Many people assume, 'Oh, it's summertime - of course we have to take a fabulous family vacation,' or 'Of course we have to send Travis and Kaitlyn to the same camp their friends are going to,' when, really, they can't afford it," says Tyson, author of Personal Finance for Dummies, 5th Edition. "They may not think of it this way, but they're trying to keep up with the Joneses, or worse, the Joneses' kids - and they're harming themselves in the long run."

Tyson says overspending on summer activities and "stuff" doesn't do kids any favors. In fact, your conspicuous consumption may be teaching them poor money management habits, which sets them up for problems in their own financial lives down the road.

"Make this the summer that you rein in your spending and start teaching kids by example how to make smart financial decisions," urges Tyson. "You may be surprised to find that, far from feeling that you're sacrificing, this is the most fun, fulfilling summer you've ever had."

Here are a few of his tips:

  • Think about your value system before you make your summer plans. The way we spend our money and our time reveals our values, says Tyson. Actions really do speak louder than words - and your kids are listening. "You'd never say to your children, 'You can't have fun unless you spend a lot of money to have prepackaged experiences,' or 'Kids can't have fun hanging out with their families' or even 'It's fine to rack up lots of debt - to take a lavish vacation or put in a pool, for instance - even if you don't know how you're going to pay it back,'" says Tyson. "And yet, that's what kids hear when you make certain decisions about how you spend your summer." His point? Really think about what's important to you - and what message it sends - instead of following the summer crowd.

  • Don't charge summer activities. Period."If a vacation or a summer camp doesn't fit your budget, it doesn't fit your budget," says Tyson. "Use debt only to make investments in things that gain value, such as real estate, a business, or an education. If you can't pay cash for summer trips and activities, don't do it or buy it."

  • When you're trying to decide whether you can afford a vacation, factor in all the hidden costs. Before you reserve your hotel, sit down, wrack your brain, and make a list of all the expenses you may have forgotten, advises Tyson. "The cost of a vacation is not just hotel and airfare," he says. "It's also the new swimsuits you might have to buy; it's the gas you'll burn driving around in the rental car; it's the cost of boarding your dog and it's the cost of snacks you have to buy. You can't make an informed decision until you know how much the vacation will cost when all's said and done."

  • Vacation close to home. You don't need to put the entire family on an airplane and fly thousands of miles away to have a nice vacation. Airfare is expensive, and so is the rental car you'll probably need once you get to where you're going. Regardless of where you live, there is sure to be a worthwhile destination within a few hours' drive: a beach, a mountain range, a national park, or an exciting city. "When you get in the car and drive for a few hours, you still have that getting-away-from-it-all feeling, but without the huge price tag," notes Tyson. "Do some research ahead of time and you can plan for some fun and inexpensive activities - say, attending a festival or hiking to a breathtaking waterfall. You'll actually enjoy your vacation instead of fretting about how much it's costing."

Be a smart vacationer. No matter where your wanderlust leads you and your family, you can cut costs.

READ MORE: Save money with these simple fixes

Here are a few tips:

1. Plan, plan, plan.
Do plenty of research before you ever leave home so you'll know the best and most budget-friendly activities and destinations in advance. "It's when we fail to plan ahead that we fall prey to overpriced tourist traps," notes Tyson.

2. Don't go overboard on the hotel.
There's really no reason to spend big bucks on a room you'll do little more than sleep in.

3. BYOF: Bring your own food. If you're taking the family to a theme park, bring along a backpack of snacks. (If you don't, be prepared for some serious sticker shock!) And choose a hotel room with a kitchen (or vacation home) so you can prepare a few meals in.

4. Don't buy a bunch of T-shirts and trinkets. It's usually better to spend the money on photos than "keepsakes" (i.e., clutter you don't need).

5. If your child brings along a friend, make sure he pays his own way. "Don't assume that because Billy is inviting his friend Josh, you have to pay for Josh's meals, amusement park tickets, and so forth," says Tyson. "If you aren't comfortable having a frank discussion with Josh's parents ahead of time about who pays for what, don't invite him."

READ MORE: 9 ways to teach kids about money

6. Strapped for cash? Dream up creative vacation alternatives. For instance, you can "vacation at home" by spending a week exploring fun, kid-friendly destinations - zoos, museums, gemstone mines - within easy driving distance of your home. Or spend a few nights camping in a local wilderness spot. (Assuming you already have the tents, sleeping bags, and other gear, that is; otherwise you'll spend a fortune on your "roughing it" adventure!) Or visit relatives you rarely see who have an unfamiliar lifestyle - if you're a "city mouse" family, spend a few days on the farm with Great Aunt Bertha. "The point is, you can find endless fun and educational activities that don't require a major outlay of money," says Tyson. "Use your imagination."

7. Skip the expensive summer camp. It's easy to see why summer camps are popular: kids get to spend weeks on end swimming and playing sports. Unfortunately, these adventures can cost thousands of dollars, and especially if you have more than one child, can be costly. If summer camp is a "must" for your kids, seek out the more affordable ones run by non-profit organizations or churches, says Tyson. But don't assume your kids have to go to summer camp at all.

"If you think about it, this is the time of year families should be together," he says. "The kids are out of school; they don't have homework to take up their time; the weather is nice - wouldn't it be better to spend that time doing fun things as a family?"

8. Don't rule out "summer jobs" for your kids. If you're worried that, in the absence of summer camp, your kids will spend their summer lounging in front of the TV and computer and playing video games, put them to work. No, seriously, says Tyson. In addition to their regular chores, give your kids summer projects to complete, such as painting their rooms (under your supervision, of course) or designing, planting, and maintaining a flower garden in the yard. Or volunteer them to walk an elderly neighbor's dog or (if they're old enough) cut herlawn.

"Working is good for kids," notes Tyson. "You can pay them a modest allowance for their labor, which helps them learn financial responsibility."

9. Encourage your kids to give this summer, not receive. Spending lots of money on kids, whether in the form of vacations, summer camps, or brand new bikes, can breed materialism and a sense of entitlement. You can counteract these forces by insisting that your children spend some time giving back this summer. This will also help foster compassion for others in your children. "There are many nonprofit organizations for which kids and entire families can volunteer," says Tyson. "Of course, it doesn't have to be that structured. You can make a decision to, say, visit nursing home residents once a week. Adopting a 'cause' as a family helps kids gain a healthier perspective to see that others are less fortunate, and frankly, it serves as a good reminder for parents as well." Generally, it's best not to indulge children any time of the year, says Tyson.

"Toys, art classes, sports, field trips, and the like can rack up big bills, especially if you don't control your spending," he writes in "Personal Finance For Dummies". "Some parents fail to set guidelines or limits when spending on children's programs. Others mindlessly follow the examples set by the families of their children's peers. Introspective parents have told me that they feel some insecurity about providing the best for their children. The parents (and kids) who seem the happiest and most financially successful are the ones who clearly distinguish between material luxuries and family necessities."

Eric Tyson, MBA, is one of the nation's best-selling personal finance book authors and has penned five national bestsellers (he is also the only author to have four of his books simultaneously on Business Week's business book bestseller list).