Here’s why you should adjust your budget according to the seasons
Understanding the natural ups and downs of your spending can help you plan ahead — and optimize your savings during the quieter months.
5 min read
Not every season looks the same when it comes to your finances. One month you might be springing for gardening supplies, the next thing you’re splurging on summer vacations, wedding gifts, or back-to-school shopping, and before you know it, the holidays hit. Creating a standard monthly budget can be a good tool, especially if you’re new to budgeting, but these don’t usually have the flexibility to adapt to the nuances of each year.That’s where season-based budgeting comes in. When you take into account the natural ups and downs your spending might take throughout the year, you can plan ahead to help you anticipate or avoid potential mid-year headaches.
Your spending according to the seasons
Life doesn’t usually follow a tidy, consistent spending plan. Your budget might feel perfectly fine one month and completely upside down the next. We invite you to take a look at the unique costs each season might hold.
Spring: Taxes, tune-ups, and travel costs
As soon as the temperature begins to rise, your spending can, too. With bars and restaurants opening their outdoor spaces, many will start eating out more. Household maintenance expenses can also crop up, from bike tune-ups to balcony garden supplies for the coming warmer weather. And with summer right around the corner, vacation costs — like flights and accommodation — might start to hit your bank account in the spring. In many countries, spring is also tax season, which could mean a surprise bill or a welcome bonus.
Summer: Plans, plans, plans
Summer brings endless opportunities for fun — and plenty of expenses to match. Vacations are often the biggest splurge, whether it’s a family road trip or a dream getaway. For music lovers, the costs for festivals and outdoor events can quickly add up, especially with tickets, food, drinks, and lodging. Wedding season will also be in full swing, meaning travel, gifts, and maybe even a new outfit or two. And summer is also the most common time to move, bringing costs like rental trucks, housing deposits, or hiring movers.
Fall: Back to class/work
For many, fall is often about settling back into the swing of things, and it can be a great time to take stock, slow down and replenish your savings. For families and students, back-to-school shopping can translate to a budget-adjustment, with everything from supplies and clothes to tech gear adding up. Even if you’re not heading back to class, fall often calls for a seasonal wardrobe update — think: sweaters, boots, and jackets to prep for cooler weather.
Winter: Holiday cheer meets hibernation
The first weeks of winter can be a whirlwind of expenses, with holiday shopping, travel, and end-of-year celebrations taking center stage. Gifts for loved ones, festive meals, and decorations can quickly add up, and if you’re traveling to visit family or escape the cold, those costs can be significant, too. New Year’s Eve parties or other celebrations often add a final hit to your budget before the year ends. But once all the festivities have finished, winter is also a great time to focus on saving. With shorter days and cozier nights, you can give your budget a much-needed breather after the holiday rush.
Save up with Spaces
Use N26 Spaces sub-accounts to easily organize your money and save up for your goals.
Spotting your individual seasonal spending patterns
Understanding your seasonal spending is the key to crafting your season-based budget and planning for the months ahead. Here’s how to do it:
1. Look back at your spending
First, you need to know where your money usually goes each year. Review your bank statements from last year and zoom in on the seasonal expenses. Look for one-off costs that pop up during certain times of the year, like vacations, wedding gifts, or holiday shopping. Some bank accounts come with insights or analytics that help you look back at your spending, or you can use a spreadsheet to filter through your expenses. This financial retrospective will give you some clear numbers that you can use as a reference.
2. Map out planned expenses
Once you look at last year, do the same for the year ahead. Are you planning a big move? Are you invited to six different destination weddings? Having a list of anticipated expenses will help you plan and save for them, especially when combined with the data about your spending last year.
3. Tweak your season-based budget
Now that you know when your seasonal expenses are coming, it’s time to create a savings plan to balance out the highs and lows of your annual spending cycle. You can set up a seasonal buffer by saving a little extra during your quieter months. Then, put that money aside so it’s ready when you need it for summer vacations or holiday shopping. This helps make sure that you don’t have to stress about your cash flow when the busy times roll around.
Off-season saving
Saving during the quieter months can be your secret weapon for making it through the busy ones. When things slow down — like in January and February, after the holiday rush — it can be the perfect opportunity to build up a savings buffer. These “off” times often come with fewer big expenses, so you can set aside extra cash for the busier periods ahead. Keep in mind that your situation might be unique from that of others, so if you’re not able to save as much during so-called “quieter” months, that’s perfectly okay. The key is that you find out what’s right for you, and tailor your budget accordingly. The more proactive you can be, the more ready you are for whatever the year throws your way.N26 top tip: Once you’ve created your season-based budget for the year, you can use sub-accounts like Spaces to put it into action: a Space for your summer vacation in July, one for the new laptop you’ll need in September, or one for the New Year’s Eve bash you’re planning to host.
All-season banking with N26
N26 Spaces let you set aside money for different goals, so that your festival fund doesn’t get mixed up with your wedding gift budget. These subaccounts sit alongside your main account like virtual piggy banks, each with its own name, savings goal, and IBAN. Compare accounts today and find the one that’s right for your life, all year round.
