5 Money Moves to Make When It's Too Hot to Go Outside


The heat wave is coming — are you ready? For many, summer marks the start of vacation season, especially for kids or those who have several weeks off work. While it is good to take a much-needed break, don't get too lackadaisical when it comes to your bank account this season.

Here are a few money moves you should make when it is too hot to do much else. You will be thankful later that you didn't take a vacation from managing your money wisely.

1. Comparison shop insurance plans

When you've had the same auto insurance and home insurance for over a year, you might be stuck in the mindset that you are paying the best price, especially if you shopped quotes the year previously. Recently, my husband and I thought we were getting the best price for our car insurance because it had been the cheapest option for us for the past six years, and we had racked up several discounts for being on the plan so long.

However, replacing our paid-off SUV with a new van and having a minor accident the year before slowly made our rates creep up. I honestly didn't think another company could offer cheaper insurance, but a few quick searches online helped us find the same coverage for $500 less a year.

Bottom line: Don't assume you are paying the best price for insurance just because your plan was the cheapest when you shopped for rates earlier. (See also: Here's How a Claim Will Impact Your Car Insurance)

2. Put investing on autopilot

Don't want to think about investing on your summer break? Me neither. Investing is similar to exercising. Only a select few really love to partake and the rest of us know we must do it to remain (financially) healthy. Thankfully, you don't have to become an expert in the stock market to start investing your money. Instead, try these simple ways to put your investments on autopilot:

  • Start with setting up automatic deposits from your paycheck into your 401(k) through your employer. If you can set your account to increase your investment by 1 percent each year, you can grow your retirement fund without feeling the monetary sacrifice.

  • Use an app like Acorns, which rounds up your purchases to the nearest dollar and automatically invests your spare change.

  • Set up automatic payments to investment accounts. Both Fidelity and Ally offer different online investment accounts where you can set up automatic transfers. While they might require a minimum amount to start the account (i.e. Ally's professionally-managed portfolio account requires $2,500 to open), you can set up small amounts of money to be transferred each week. Think about it. You really won't miss $10 to $20 a week, but setting up the transfer will equate to $520 to $1,040 invested each year.

(See also: 6 Questions All Rookie Investors Should Ask)

3. Declutter, sell, and donate

It may be too hot for a garage sale, but that doesn't mean you can't sell some unused items and free up space around the house. Make a game out of decluttering and tackle one small area of your air-conditioned home each day of the week. You can worry about your garage, basement, or attic in the cooler months. Make your decision quickly about what to keep, sell, and donate. Remember, anything you don't use regularly is taking up prime real estate in your home. Don't try to justify a need for it in the future.

If the item is larger, such as a baby swing or chair, list it on Craigslist, OfferUp, or local Facebook selling groups. If the item is easy to ship and can make you more than $10, like designer jeans or an old iPad, list it on eBay. For eBay sales, I schedule postal pickups so that I don't have to deal with the heat and post office lines.

If the item does not sell well locally or through eBay, schedule a donation pickup. Fill up a box of unwanted goods, schedule a pickup with a local second hand store, leave it on your porch, and save the donation slip for tax season. Finally, enjoy a large glass of lemonade in your decluttered home. (See also: 11 Easy Ways to Earn More on eBay)

4. Review your credit reports and credit score

Plan to get your credit in tiptop shape this summer, especially if you hope to purchase a car, home, or open a new credit card in the near future. An excellent credit score will save you money on lower interest rates.

First things first, order a free copy of your credit report through AnnualCreditReport.com. You are entitled to three free copies — one each from Experian, Equifax, and TransUnion — every year. Check the report for inaccuracies and make sure everything looks as expected. (See also: How to Read a Credit Report)

Next, order your credit score. You can purchase your FICO score from myFICO — it will run you about $19.95 a piece from each of the three credit bureaus. You can also get a good idea of what your score is through free sites like Credit Karma and Credit Sesame, or through credit cards that offer free credit scores.

Note that these free scores often have their own metric for credit scoring, and that number may differ slightly from your official FICO score, which is what most lenders use when determining whether or not to approve you for credit. Still, a free score will give you a good ballpark estimate of where your score stands. (See also: I Checked My Credit Score in 11 Places — Here's What I Learned)

What I like about both Credit Karma and Credit Sesame is that they will show you which areas you need to improve to boost your score. For example, if your credit usage is too high, the site may recommend that you boost your score by paying off debt and/or increasing your credit limit, either by opening up a new card or asking for a limit increase. Of course, be aware that asking for a credit increase and opening up a new card can be reported as hard inquiries on your credit report, and too many hard inquiries can negatively affect your credit score. (See also: 5 Ways to Improve Your Credit Score Fast)

5. Start your holiday savings fund

Even though Thanksgiving and Christmas are months away, they are coming, and they will be costly. Avoid the holiday debt trap or credit card hangover by saving way ahead of time. If you start in June, you have six months to build up a savings fund without the stress. Calculate how much you spent on Thanksgiving and Christmas/Hannukah/Kwanzaa the year before, and use it as a guideline for how much you should save.

For example, if the winter celebrations cost your family $1,000 between food shopping, decorations, presents, and outfits, divide that number by six and aim to save that much each month. It is much easier to save $167 each month for six months than to try and find an extra $1,000 in your budget between November and December. (See also: Avoid These 5 Common Holiday Budget Pitfalls)

Don't waste your summer months wishing you were on a beach somewhere or enviously looking at friends' and co-workers' vacation pictures. Instead, work on your finances with these easy steps so that you can be the one enjoying a debt-free vacation next year.

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