313 | How to Pay for Summer Camp Without Stress

We know that annual expenses like summer camp and the holidays are coming every year, but somehow they catch most people off guard.

The key in not allowing these expenses to stress you out is to plan for them.

In this episode, let’s talk about how to make big annual expenses feel more manageable and create a clear plan to handle them without stress.

• • talking with moms at my kids’ school about paying for summer camp
  • how people typically handle annual expenses
  • a simple shift that makes annual expenses more manageable
  • the math behind planning for an annual expense
  • why planning for these expenses is important
  • thinking through your annual expenses
  • where to put the money for your annual expenses

• Apply for a strategy session

You’re listening to Personal Finance for Lawyers. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back.

Today, we are talking about something I think most parents can relate to right now, and that is summer camp. So I was talking with a few of the moms from my kids’ school about the camps that our kids were going to and all of that, and one of the moms was saying it feels like you need a second job just to pay for summer camp or something to that effect. I taught them what I have always taught my clients about these big one-time expenses, and I thought this was the perfect time to share that information with you.

What often happens for people with summer camp, with holidays, with your membership dues for your bar, all of that stuff tends to hit people like a surprise. And so it’s like, oh man, all of a sudden there’s this thousands of dollars bill that’s due, and it’s like I’m stressed. I gotta figure this out. I’m scrambling like all that kind of stuff.

And the thing that I want you to get from our conversation today is annual expenses are not surprises. We know about them already, but they feel like a surprise when you don’t plan for it. When we have these annual expenses, these things that come up every single year, they are things that we can plan for. It does not have to be a surprise, all of a sudden, you owe me $2,000 or whatever the cost is, right? These things are predictable. The problem is not the expense itself. It is the lack of preparation for it.

If you have an annual expense that comes up, like summer camp, like the holidays, whatever other big annual expenses that come up for you, if it’s happening every single year, you need to be planning for it. And you can do that by putting it in your monthly budget or spending plan. When you approach this the right way, it makes those expenses feel a lot more manageable.

So, let’s say summer camp is $2,500. If we take that cost and we divide it by 12, so somewhere around $200, $210, something like that, you’re gonna save that amount every month. So, $2500 divided by 12 is approximately $200, and you’ve got another 100 that you’ve got to cover. Or you can split that out as well, and make it, you know, two… It’s $208.33, so you could save that amount every month, and you make it automatic. $200 coming out of your account, going into savings every month, you’re not going to notice that as much as the $2,500 that’s due when registered for camp.

So, now, instead of it being this big hit, this, oh my gosh, am I going to do. Scrambling, trying to figure out how to pay for camp, and feeling like I need a second job. $200 makes it a lot more manageable. It becomes this habit that you’re not even thinking about because we’re going to just automatically have that going into a savings account, so that when it’s time to pay for camp, we just go over to the savings account, pull that money, and make that payment.

The reason this is so important is it’s putting action behind that statement, “I’ll figure it out later.” We often tell ourselves, when this thing comes up, I’m scrambling, I’m stressed, I’m going to make this payment, and I’ve got to figure out what to do with this. Or maybe you don’t, maybe you’ve never even considered what to do to plan better for this expense.

But it allows you to make a plan. It allows you to make that cost more manageable for yourself, so that you are able to have that money set aside, and it removes the, you know, that up and down roller coaster that you may feel like, “Oh my gosh, I have to pay for this, I’ve got to figure this out.”

You figured it out. It’s all done right, and that way you’ve got the money set aside, you’ve planned for this big expense. You don’t have to put it on a credit card or otherwise feel stressed or whatever.

So I want you to think about those types of expenses for you. Like we just talked about summer camp, maybe your kid is in some sort of sports where there’s a big expense every year registering for that. Maybe it’s the holidays, like we talked about, or a summer vacation. Maybe it’s your bar dues. Whatever it is, think through what are those big annual expenses that catch you off guard every year, and let’s make a plan for them. Identify what the total cost of that thing is, divide it by 12, and now it’s a part of your monthly budget versus April’s here, and now I’ve got this $2,500 bill I’ve got to figure out how to cover.

Once you have those costs, the monthly amounts that you’re going to save, I want you to put it in a savings account. We have talked many times about Ally Bank, which is one of the banks that I use, and I really like their savings account, because it has these buckets where you can designate a portion of the balance in your account for these different items. So it’s a single account, but I’ve got my emergency fund bucket, I’ve got my vacation bucket, I’ve got whatever other bucket you need, right, my summer camp bucket, my sports bucket, et cetera.

Having that money going straight into that account with the bucket where it’s labeled, you know, this is how much I need for summer camp. This is how much I’ve already saved for it. This is how much more I have to go. And you’re going to make this an automatic transfer, so you don’t have to think about it, right? And again, having that money set aside is going to give you so much peace of mind. It’s going to eliminate that stress, that scramble that often happens when those big expenses come up.

The main thing here is you don’t need a second job to pay for summer camp. You don’t have to feel stressed with these one-time expenses, you just need to plan for it. You need preparation that allows you to spread out that payment, that makes it more manageable. I can do $200. $2500 all at once might be a stretch. So, making sure that you plan for it, you eliminate all that stress.

All right, so this is one of the easiest things that you can do to better plan your spending and to eliminate the stress you might have around your finances. And if you would like help with making a plan for your finances or achieving whatever other financial goals you have, head to rhothomas.com/apply and we can do a coaching session.

All right, that is it for this week’s episode. Please share this episode with a friend who you think it uses information. Again, I know a lot of parents are in that camp preparation season, so sharing this episode so that we can all be prepared for camp is very helpful, and as always, I appreciate your support.

As we close out, friend, I pray that you take the information you learn here, apply it in your life, and open up to the realization that wealth is available to you. As you do that consistently, week after week, you’ll continue to take steps to take back control of your time, build wealth, and live the life of freedom and choice you deserve. Talk to you later.